Case Law Details
Axis Bank Limited Vs DCIT (ITAT Ahmedabad)
Facts- The assessee is a Scheduled Bank and is engaged in the business of banking. The assessee in the year under consideration has earned exempt income of Rs. 13,83,14,263/- by way of dividend. The assessee against such income has made the disallowance of Rs. 1,06,39,198/- under the computation of income under protest in pursuance to the provision of section 14A of the Act. However, the AO during the assessment proceedings found that there was no basis for making the disallowance of Rs. 1,06,39,198/- against the exempted income. As per the AO the disallowance needs to be made in terms of the provision of Rule 8D of Income Tax Rules r.w.s. 14A of the Act.
Addition on account of commission income-
The assessee till the immediate preceding assessment year was recognising the commission income generated on furnishing the bank guarantee on upfront basis. However, the assessee from the year under consideration has changed its policy of recognising the commission income qua to such bank guarantee by recognising the same on a pro rata basis.
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