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| The Tax Publishers2020 TaxPub(DT) 2915 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
Assessee being a bank, shares held as 'stock-in-trade' could not be considered for the purpose of working of disallowance under section 14A irrespective of fact whether exempt income was derived from such shares or not and strategic investments held by assessee which yielded exempt income alone were to be considered for the purpose of working out disallowance under section 14A read with rule 8D(2).
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Disallowance under section 14A - Expenditure against exempt income - Dividend earned by assessee-bank on strategic investments in shares as well as on shares held as stock in trade -
Assessee-bank earned tax free dividend income on shares held as stock-in-trade as well as shares held as strategic investments. Also, assessee claimed suo moto disallowance under section 14A. AO invoked rule 8D(2) and made disallowance considering investments in entirety. Held: Assessee being a bank, shares held as 'stock-in-trade' could not be considered for the purpose of working of disallowance under section 14A irrespective of fact whether exempt income was derived from such shares or not and strategic investments held by assessee which yielded exempt income alone were to be considered for the purpose of working out disallowance under section 14A read with rule 8D(2).
Relied:Maxopp Investments Ltd. (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC) and Vireet Investments (2017) 165 ITD 27 (SDel) : 2017 TaxPub(DT) 1760 (Del-Trib).
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 143(3)
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