The mechanical disallowance u/s 14A r.w. Rule 8D is also being added to the book profit by the AO irrespective of the fact whether assessee has actually debited any such expenditure in its P&L Account which is against the pronouncements given by various Judicial authorities in the recent past.


The mechanical disallowance of expenditure u/s 14A r.w. Rule 8D alleged to have been debited by the assessee in its P&L account may be done away with while calculating its book-profit taxable u/s 115JB of the Act.

Section 14A– Instruction for proper application


Even in cases where there is no claim of expense in relation to exempt income, it is generally seen that Assessing officers are making dis allowances by invoking Rule 8D.


It is suggested that an instruction may be issued so that no dis allowance may be made under section 14A in such cases.

Source- ICAI Pre- Budget Memorandum–2018 (Direct Taxes and International Tax)
Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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Category : Income Tax (28069)
Type : News (13868)
Tags : Budget (1957) Budget 2018 (400) ICAI (2696) rule 8D (103) Section 14A (280)

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