The Tax Publishers2020 TaxPub(DT) 2875 (Mad-HC)

INCOME TAX ACT, 1961

Section 14A

AO was not justified in making excessive disallowance under section 14A and CIT(A) rightly restricted disallowance to extent of dividend income declared by assessee.

Disallowance under section 14A - Expenditure against exempt income - Expenditure whether to be restricted to exempt dividend income -

Revenue challenged order of Tribunal holding that disallowance under section 14A read with rule 8D should be restricted to extent of exempted income especially when neither section 14A nor rule 8D provide for any such restriction. Held: AO was not justified in making excessive disallowance and CIT(A) rightly restricted disallowance to extent of dividend income declared by assessee. In fact Tribunal recorded that revenue could not controvert findings rendered by High Court of Delhi in case of Joint Investments Private Ltd.

Followed:Joint Investments Pvt. Ltd. v. CIT (2015) 372 ITR 694 (Del) : 2015 TaxPub(DT) 1375 (Del-HC) CIT v. Taikisha Engineering India Ltd. [ITA No. 115/2014 decided on 25-11-2014] : 2015 TaxPub(DT) 0391 (Del-HC) Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT & Anr. (2010) 328 ITR 81 (Bom) : 2010 TaxPub(DT) 2182 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2011-12 & 2012-13


INCOME TAX ACT, 1961

Section 4

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