Section 14A Disallowance Remanded as AO Failed to Compute Actual Expenditure

Pragathi Krishna Gramin Bank Vs JCIT (Karnataka High Court) The Karnataka High Court considered two appeals filed by the assessee bank for Assessment Years 2011-12 and 2012-13 challenging the order of the Income Tax Appellate Tribunal. The appeals raised two substantial questions of law: (i) whether the disallowance under Section 14A read with Rule 8D could exceed the expenditure incurred for earning exempt income, and (ii) whether the assessee was entitled to claim a higher deduction under Section 36(1)(viii) by adding back amortization and depreciation on Statutory Liquidity Ratio (SLR) inve...