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| The Tax Publishers2020 TaxPub(DT) 1793 (Chen-Trib) INCOME TAX ACT, 1961
Section 14A
No disallowance under section 14A was permissible in terms of Rule 8D in case of assessee engaged in banking business.
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Disallowance under section 14A - Expenditure against exempt income - Applicability of section 14A in case of banking company -
Assessee-banking company earned tax free dividend income on shares and units of mutual funds. AO invoked rule 8D and worked out disallowance under section 14A. Held: CBDT itself has accepted the line of thinking that income from investment made by a banking concern is part of its business of banking to be considered under the head 'Business and Profession'. Direct result of this view is that such investments would be only a part of stock-in-trade and once holding of investment was considered incidental to the business of banking to assessee, section 14A could not have been applied and no disallowance could be made.
Relied:UCO Bank in ITA No. 1615/Kol/2016 & CO 51/Kol/2018, dated 21-8-2018 for assessment year 2012-13, Punjab National Bank v. CIT, Range-14, New Delhi in (2019) (1) TMI 689-ITAT Delhi and ITA Nos. 4253 & 2236/Del/2011, ITA Nos. 1788 & 4722/Del/2012; ITA Nos. 2406/Del/2013; ITA Nos. 2469/Del/2014; ITA Nos. 2469/Del/2011; ITA No. 4718/Del/2012 and ITA Nos. 2966/Del/2013, dated 9-1-2019 : 2019 TaxPub(DT) 1396 (Del-Trib)
REFERRED :
FAVOUR : in assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 5
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