Dy. CIT v. Jammu & Kashmir Bank Ltd.

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The Tax Publishers2013 TaxPub(DT) 0717 (Asr-Trib) : (2013) 051 (II) ITCL 0135 : (2013) 142 ITD 0553 : (2013) 152 TTJ 0522 : (2013) 083 DTR 0187 INCOME TAX ACT, 1961 --Business expenditure--Disallowance under section 14A Interest, management and administrative expenses again exempt--Assessee-banking company had invested in tax for a securities out of its own funds which was available with it for investment purposes. Assessee submitted that assessee had interest free fund of Rs. 2,265.25 crores at beginning of the year and Rs. 2,736.65 crores at the end of the year, which indicates that there was an increase of interest free funds to the extent of Rs. 471.40 crores. Further profit of relevant year after declaring dividend and dividend tax amounting to Rs. 2,37.52 crores were also pumped in such accounts. This interest free fund to the extent of Rs. 7,08,92 crores was available with assessee bank. Assessing officer disallowed interest, management and administrative expenses on the ground that these expenses were incurred to wealth tax free income. Commissioner (Appeals) however partly reversed assessing officer's order. Held: ,/i>Not so. Assessing officer had not brought on record any expenditure which had actually been incurred by assessee on account of extent expenditure or management or administrative expenditure was concerned for dearning of exempt income. Commissioner (Appeals) was, therefore, allowed appeal of assessee in relation to deleting addition of Rs. 7.05 crores being proportionate disallowance on account of interest expenses. However he was not justified in retaining disallowance even of Rs. 8.10 lakhs out of Rs. 2.26 crores disallowed by assessing officer. Income Tax Act, 1961 Section 14A Income Tax Rules, 1962 Rule 8D IN THE ITAT, AMRITSAR BENCH H.S. SIDHU, J.M. & B.P. JAIN, A.M. Dy. CIT v. Jammu & Kashmir Bank Ltd. ITA No. 136/Asr/2010 A.Y. 2002-03 31 December, 2012 Income-tax Act, 1961, s. 14A; In favour of: Assessee Circular No. 780, dt. 4th Oct., 1999 Revenue by : Tarsem Lal Assessee by : R. K. Gupta ORDER SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0717 (Asr-Trib) : (2013) 051 (II) ITCL 0135 : (2013) 142 ITD 0553 : (2013) 152 TTJ 0522 : (2013) 083 DTR 0187

INCOME TAX ACT, 1961

--Business expenditure--Disallowance under section 14A Interest, management and administrative expenses again exempt--Assessee-banking company had invested in tax for a securities out of its own funds which was available with it for investment purposes. Assessee submitted that assessee had interest free fund of Rs. 2,265.25 crores at beginning of the year and Rs. 2,736.65 crores at the end of the year, which indicates that there was an increase of interest free funds to the extent of Rs. 471.40 crores. Further profit of relevant year after declaring dividend and dividend tax amounting to Rs. 2,37.52 crores were also pumped in such accounts. This interest free fund to the extent of Rs. 7,08,92 crores was available with assessee bank. Assessing officer disallowed interest, management and administrative expenses on the ground that these expenses were incurred to wealth tax free income. Commissioner (Appeals) however partly reversed assessing officer's order. Held: ,/i>Not so. Assessing officer had not brought on record any expenditure which had actually been incurred by assessee on account of extent expenditure or management or administrative expenditure was concerned for dearning of exempt income. Commissioner (Appeals) was, therefore, allowed appeal of assessee in relation to deleting addition of Rs. 7.05 crores being proportionate disallowance on account of interest expenses. However he was not justified in retaining disallowance even of Rs. 8.10 lakhs out of Rs. 2.26 crores disallowed by assessing officer.

Income Tax Act, 1961 Section 14A

Income Tax Rules, 1962 Rule 8D

IN THE ITAT, AMRITSAR BENCH

H.S. SIDHU, J.M. & B.P. JAIN, A.M.

Dy. CIT v. Jammu & Kashmir Bank Ltd.

ITA No. 136/Asr/2010

A.Y. 2002-03

31 December, 2012

Income-tax Act, 1961, s. 14A; In favour of: Assessee

Circular No. 780, dt. 4th Oct., 1999

Revenue by : Tarsem Lal

Assessee by : R. K. Gupta

ORDER