The Tax Publishers2019 TaxPub(DT) 4856 (Mum-Trib)

INCOME TAX ACT, 1961

Section 14A

It was not in dispute that rule 8D applicable from assessment year 2008-09 onwards and, therefore, it was justifiable to make disallowance under section 14A on reasonable basis in the prior period. CIT(A) restricted section 14A disallowance to the extent of 10% of dividend income which nowhere seemed unjustifiable.

Disallowance under section 14A - Expenditure against exempt income - Non-applicability of rule 8D - Disallowance on reasonable basis

Revenue challenged the restriction of disallowance under section 14A to the extent of 10% of exempt income.Held: It was not in dispute that rule 8D applicable from assessment year 2008-09 onwards and, therefore, it was justifiable to make disallownce under section 14A on reasonable basis in the prior period. CIT(A) restricted section 14A disallowance to the extent of 10% of dividend income which nowhere seemed unjustifiable.

Supported by:CIT v. Essar Technology Ltd. 90 Taxmann.com 2 (SC) : 2018 TaxPub(DT) 7982 (Ker-HC) & Godrej & Boyce (2010) 328 ITR 81 (Bom) : 2010 TaxPub(DT) 2182 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2006-07 to 2008-09


INCOME TAX ACT, 1961

Section 80-IB(4)

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