rule 8D

No applicability of section 14A on LTCG exemption of Rs.1 Lakh

Income Tax - No applicability of section 14A on exemption of Rs.1,00,000/- (One Lakh) Long Term Capital Gain (LTCG) under Section 112A of Income Tax Act, 1961. Section 14A shall not be applicable on LTCG income earned u/s 112A. The answer to the questions of applicability of section 14A for LTCG u/s 112A, as income covered under section […]...

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Analysis of Section 14A read with Rule 8D

Income Tax - Section 14A of the Income Tax Act, 1961 (‘the Act’) provides that no deduction shall be allowed of any expenditure incurred in relation to income not includible in total income i.e. expenditure related to exempt income is not tax deductible....

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Whether section 14A disallowance is related to Income Earning

Income Tax - Whether disallowance under section 14A of the income tax act, 1961 is related with earning of actual income or notional/anticipated income? Most of taxpayers under Income tax act, 1961 afraid to file appeal against additions made by assessing officers due to fear of departmental procedures/penalty/bar/attachment in  the thought process o...

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Section 14A of Income Tax r.w. Rule 8D – Supreme Court upheld no income tax in absence of exempt income

Income Tax - Section 14A of Income Tax Act, 1961 r.w. Rule 8D of Income Tax Rules: Supreme Court standpoint – No tax in the absence of any exempt income The much debated and extensively litigated issue has been resolved by the Supreme Court in 2018 & 2019. The article below summarises issues encountered by the assessee’s prior […]...

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Analysis on Disallowance under Section 14A of Income Tax Act

Income Tax - The very intent of the section 14A of the income tax Act is that no expenditure shall be allowed as deduction, in computing the Total income of the Assessee, if such expenditure is incurred to earn an income, which is exempt under Income tax act. That is to say that no deduction shall be allowed in respect of the expenditure incurred in r...

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Stop Mechanical disallowance of expenditure u/s 14A r.w. Rule 8D: ICAI

Income Tax - 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....

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Bombay high court to hear petition challenging Constitutional validity of Rule 8D

Income Tax - As earlier intimated to you, Writ Petition bearing No. 50 of 2010 (Indian Exporters Grievances Forum & Other vs. CIT) challenging the constitutional validity of Rule 8D has been admitted on 12.1.2010 by Hon’ble Shri Justice Dr. D.Y. Chandrachud and Hon’ble Shri Justice J.P. Devadhar of the Bombay High Court. ...

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Expenditure on R&D for manufacture of aircrafts to be sold allowable U/s. 37

Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court) - Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court) The fact that a certain payment constitutes income or capital receipt in the hands of the recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer. It has further been held that whether ...

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ITAT restricts Section 14A Disallowance to the extent of exempt income

DCIT Vs DLF Universal Ltd. (ITAT Delhi) - Disallowance u/s 14A got restricted to the extent of exempt income, even if the provisions of the section 14A were attracted....

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Section 14A disallowance not sustainable if AO fails to records satisfaction about correctness of claim of assessee

Ambuja Housing & Urban Infrastructure Co. Ltd Vs DCIT (ITAT Kolkata) - Ambuja Housing & Urban Infrastructure Co. Ltd Vs DCIT (ITAT Kolkata) It appears that while invoking Rule 8D of the I.T Rules, 1962 the AO has not pointed out/identified any specific infirmity in the disallowance so offered by the appellant/ assessee. A single sentence ‘explanation of the a...

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Section 14A Disallowance cannot exceed exempt income: ITAT Pune

Santosh Mohanlal Rathi Vs DCIT (ITAT Pune) - Santosh Mohanlal Rathi Vs DCIT (ITAT Pune) ITAT followed Hon’ble Bombay High Court decision in the case of M/s. Nirved Traders Pvt. Ltd., Vs. DCIT (ITA No.149/2017 dated 23.04.2019) wherein the Jurisdictional High Court held that the disallowance under Section 14A of the Act read with Rule 8D(2) o...

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Section 14A Disallowance r.w. Rule 8D cannot exceed Exempt Income

Ramalinga Mills Ltd. Vs ACIT (ITAT Chennai) - Ramalinga Mills Ltd. Vs ACIT (ITAT Chennai) The issue under consideration is whether disallowance of expenditure in relation to exempt income u/s.14A read with Rule 8D of I.T. Rules, 1962 is justified in law? ITAT states that, the facts borne out from records clearly indicate that the assessee has e...

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CBDT Circular No. 5/2014 Dated: 11.02.2014

Circular No. 5/2014-Income Tax - (11/02/2014) - Circular No. 5/2014-Income Tax Central Board of Direct Taxes, in exercise of its powers under section 119 of the Act hereby clarifies that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even where taxpayer in a particular year has not earned any exempt income....

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Notification No. 45/2008-Income Tax Dated: March 24, 2008 on Section 14A

Notification No. 45/2008-Income Tax - (24/03/2008) - INCOME TAX NOTIFICATION NO-45/2008, DT: March 24, 2008 Method for determining amount of expenditure in relation to income not includible in total income. 8D(1) Where the Assessing Officer, having regard to the accounts of the assessee of a previous year, is not satisfied with-(a) the correctness of ...

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Recent Posts in "rule 8D"

Expenditure on R&D for manufacture of aircrafts to be sold allowable U/s. 37

Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court)

Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court) The fact that a certain payment constitutes income or capital receipt in the hands of the recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer. It has further been held that whether a transaction is capital expenditure wou...

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ITAT restricts Section 14A Disallowance to the extent of exempt income

DCIT Vs DLF Universal Ltd. (ITAT Delhi)

Disallowance u/s 14A got restricted to the extent of exempt income, even if the provisions of the section 14A were attracted....

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Section 14A disallowance not sustainable if AO fails to records satisfaction about correctness of claim of assessee

Ambuja Housing & Urban Infrastructure Co. Ltd Vs DCIT (ITAT Kolkata)

Ambuja Housing & Urban Infrastructure Co. Ltd Vs DCIT (ITAT Kolkata) It appears that while invoking Rule 8D of the I.T Rules, 1962 the AO has not pointed out/identified any specific infirmity in the disallowance so offered by the appellant/ assessee. A single sentence ‘explanation of the assessee was considered, but not acceptab...

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No applicability of section 14A on LTCG exemption of Rs.1 Lakh

No applicability of section 14A on exemption of Rs.1,00,000/- (One Lakh) Long Term Capital Gain (LTCG) under Section 112A of Income Tax Act, 1961. Section 14A shall not be applicable on LTCG income earned u/s 112A. The answer to the questions of applicability of section 14A for LTCG u/s 112A, as income covered under section […]...

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Section 14A Disallowance cannot exceed exempt income: ITAT Pune

Santosh Mohanlal Rathi Vs DCIT (ITAT Pune)

Santosh Mohanlal Rathi Vs DCIT (ITAT Pune) ITAT followed Hon’ble Bombay High Court decision in the case of M/s. Nirved Traders Pvt. Ltd., Vs. DCIT (ITA No.149/2017 dated 23.04.2019) wherein the Jurisdictional High Court held that the disallowance under Section 14A of the Act read with Rule 8D(2) of the Rules cannot exceed the Assessee&#...

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Section 14A Disallowance r.w. Rule 8D cannot exceed Exempt Income

Ramalinga Mills Ltd. Vs ACIT (ITAT Chennai)

Ramalinga Mills Ltd. Vs ACIT (ITAT Chennai) The issue under consideration is whether disallowance of expenditure in relation to exempt income u/s.14A read with Rule 8D of I.T. Rules, 1962 is justified in law? ITAT states that, the facts borne out from records clearly indicate that the assessee has earned dividend for the impugned assessme...

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Revenue to establish proximate relationship between expenditure & exempt income for section 14A disallowance

CIT Vs Sociedade De Fomento Industrial Pvt. Ltd (Bombay High Court at Goa)

CIT Vs Sociedade De Fomento Industrial Pvt. Ltd (Bombay High Court) Here, on facts, the Tribunal noted that the AO only discussed the provisions of section 14A(l) but has not justified how the expenditure the Assessee incurred during the relevant year related to the income not forming part of its total income. The AO, according […]...

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Section 14A disallowance cannot exceed amount of exempt Income

Brindavan Beverages Pvt.Ltd. Vs DCIT (ITAT Banglore)

The issue under consideration is whether the disallowance u/s 14A can exceed the amount of exempt income? In the light of the order of M/s.Century Real Estate Holdings Pvt. Ltd. v. ACIT (supra), ITAT hold that the disallowance u/s 14A of the I.T.Act cannot exceed the exempt income....

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ITAT Deletes section 14A disallowance made without following procedures

Standard Chartered Grindlays Bank-Tax Department Vs ACIT (ITAT Delhi)

The issue under consideration is whether CIT(A) is correct in disallowing managerial and administrative expenses for earning dividend income by treating this as tax free income?...

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No section 14A disallowance if no exempt income is received during relevant year

ACIT Vs Him Urja Pvt. Ltd. (ITAT Delhi)

ACIT Vs Him Urja Pvt. Ltd. (ITAT Delhi) The assessee has also submitted before the Ld. CIT(A) that as there was no exempt income earned by assessee during the relevant previous year, no disallowance under section 14A could be made. The assessee relied upon Judgment of the Hon’ble Delhi High Court in the case of […]...

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