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| The Tax Publishers2020 TaxPub(DT) 2947 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
Since assessee was a bank, investments in shares were to be treated as stock-in-trade, hence no disallowance under section 14 could be made as regards exempt income earned thereon as it became business activity of assessee.
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Disallowance under section 14A - Expenditure against exempt income - Interest expenses under rule 8D(2)(ii) - Assessee bank having sufficient own funds--Investments held as stock-in-trade
Assessee-bank earned tax free dividend income on investments in shares but claimed no disallowance under section 14A. AO invoked section 14A read with rule 8D and disallowed interest expenses.Held: Since assessee was a bank, investments in shares were to be treated as stock-in-trade, hence no disallowance under section 14 could be made as it became business activity of assessee. Further, assessee had sufficient own fund to make investment, therefore, no disallowance on account of interest expenditure was called for.
Relied:Maxopp Investment Ltd. v. CIT, (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2005-06 & 2010-11
INCOME TAX ACT, 1961
Section 147
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