Case Law Details
H.T. Media Limited Vs PCIT (Delhi High Court)
Delhi High Court held that rejection of basis adopted by the assessee of the disallowance offered under section 14A after due application of mind and considering the reply furnished by the assessee is acceptable
Facts-
In AY 2012-2013, the Assessee earned dividend income of Rs. 5,80,00,000/-, which was claimed as exempt income u/s. 10(34) of the Act. The Assessee had suo moto disallowed a sum of Rs.1,00,000/- as expenditure towards administrative expenses u/s. 14A of the Act, in respect of the said tax-free income. The Assessing Officer (‘AO’) was not satisfied with the working of the disallowance made by the Assessee and he, therefore, determined a sum of Rs. 1,44,85,000/-as the disallowance towards administrative expenses under Rule 8D(2)(iii) of the Income Tax Rules, 1962 (‘IT Rules’). CIT(A) restricted the disallowance to Rs. 26.70 Lakhs. Whereas, Tribunal worked out disallowance at Rs. 55,12,500/-.
In AY 2013-2014, the Assessee had earned dividend income of Rs. 7.04 Crores and had suo-mouo disallowed Rs.9,75,000/- under Section 14A of the Income Tax Act, towards expenses pertaining to tax free income. The AO being unsatisfied with the suo-motu disallowance by the Assessee towards administrative expenses, determined a sum of Rs .1.15 Crores as the disallowance towards administrative expenses under Rule 8D(2)(iii) of the Income Tax Rules, 1962.
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