INCOME TAX ACT, 1961

Section 14A

Disallowance under section 14A - Quantum of - Expenditure against exempt income - Assessee's own capital in excess of borrowed funds

Assessee challenged the order of CIT(A) upholding the disallowance under section 14A. Assessee contended that section 14A was not applicable to assessee as the investments in securities yielding tax-free income were made from own funds and no expenses were incurred in relation to the exempt income. Held: Having regard to the concluded facts towards own capital in excess of corresponding investment, Tribunal accepted the plea of the assessee for deletion of proportionate disallowance of interest expenditure. As regards the disallowance under section 8D(2)(iii) towards administrative expenditure, plea of the assessee for deduction of suo moto disallowance was accepted. Accordingly, disallowance of administrative expenditure under section 14A read with section 8D(2)(iii) was sustained partly.

Followed:Pr. CIT v. Sintex Industries Ltd. (2017) 82 taxmann.com 171 (Guj) : 2017 TaxPub(DT) 1707 (Guj-HC)

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 115JB

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