| |
| The Tax Publishers2019 TaxPub(DT) 2129 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
As investment having yielded tax-free income were made out of own funds available with assessee, therefore, no interest disallowance under rule 8D(2)(ii) was called for. So far as expense disallowance under rule 8D(2)(iii) was concerned, only investments which had actually yielded exempt income during the year were to be considered to arrive at disallowance, therefore, additional expense disallowance, as computed by AO could not be sustained.
|
Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Assessee having sufficient own funds
Assessee earned tax-free dividend income on investments in shares/mutual funds and offered suo moto disallowance against the same under section 14A. However, AO invoked rule 8D, and worked out additional disallowance comprising of interest disallowance under rule 8D(2)(ii) and expense disallowance under rule 8D(2)(iii). Held: So far as disallowance under rule 8D(2)(ii) concerned, assessee's own funds far exceeded investments made by assessee accordingly, it could be safely presumed that investments were made out of interest free funds available with assessee and no interest disallowance under rule 8D(2)(ii) was called for. So far as expense disallowance under rule 8D(2)(iii) was concerned, only investments which had actually yielded exempt income during the year were to be considered to arrive at disallowance, additional expense disallowance, as computed by AO could not be sustained. Accordingly, additional disallowance was deleted.
Relied:CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC) and CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom) : 2014 TaxPub(DT) 3351 (Bom-HC); ACIT v. Vireet Investment (P.) Ltd. (2017) 82 Taxmann.com 415 (Del) : 2017 TaxPub(DT) 1760 (Del-Trib)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, MUMBAI BENCH
 SUBSCRIBE FOR FULL CONTENT
|