CIT v. PVP Ventures Ltd. - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2020 TaxPub(DT) 3781 (Mad-HC)

INCOME TAX ACT, 1961

Section 14A Rule 8D

Disallowance under section 14A read with rule 8D cannot exceed the exempt income earned by the assessee during the relevant year. Therefore, CIT (A) was justified in restricting the disallowance under section 14A read with rule 8D to the extent of exempt income earned by the assessee during the relevant year.

Disallowance under section 14A - Expenditure against exempt income - Whether expenditure to be restricted to the extent of exempt income -

AO made disallowance under section 14A read with rule 8D. CIT(A) was of the view that the disallowance made by the AO was excessive and accordingly, he restricted the same to the extent of exempt income earned by assessee during the relevant year. Tribunal confirmed the action of the CIT(A). Aggrieved, Revenue was in appeal. Held: Disallowance under section 14A read with rule 8D cannot exceed the exempt income earned by the assessee during the relevant year. Therefore, the Tribunal was justified in confirming the action of the CIT(A) in restricting the disallowance under section 14A read with rule 8D to the extent of exempt income earned by the assessee during the relevant year.

Followed:CIT v. Tidel Park Limited [T.C.A. No. 732 and 733 of 2018, dt. 7-7-2020] : 2020 TaxPub(DT) 2875 (Mad-HC)

REFERRED :

FAVOUR : In assessee's favour/Partly in favour of assessee

A.Y. :

IN THE MADRAS HIGH COURT