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| The Tax Publishers2020 TaxPub(DT) 4295 (Karn-HC) : (2021) 434 ITR 0150 : (2021) 276 TAXMAN 0128 INCOME TAX ACT, 1961
Section 14A Rule 8D
Disallowance under section 14A read with rule 8D is to be made even where the tax payer in a particular year has not earned any exempt income.
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Disallowance under section 14A - Expenditure against exempt income - No exempt income earned by assessee -
AO made disallowance under section 14A read with rule 8D. CIT(A) confirmed such disallowance. However, Tribunal held that since the assessee did not receive any dividend on investment; therefore, there was no earning of exempt income and hence, the disallowance under section 14A read with rule 8D was not permissible. Aggrieved, Revenue was in appeal. Held: In view of Supreme Court decision in the case of Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC) and CBDT's Circular No.5/2014 dated 11-2-201, it is no longer disputed that disallowance under section 14A read with rule 8D is to be made even where the tax payer in a particular year has not earned any exempt income. Accordingly, the order of the Tribunal deleting the disallowance under section 14A read with rule 8D, was quashed.
Followed:Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2008-09
IN THE KARNATAKA HIGH COURT
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