TaxGuru Newsletter Subscription
Information You Can Rely On.
Income Tax - Ever since the advent of section 14A in the statute, it has evoked squall of controversy. While the purpose of the section was to compute taxable income by whisking away the expenses attributable to exempt income, the tax department always tried to use it for fetching some more fortunes. In this article attempt has been made to look into ...
Read MoreIncome Tax - CA Ram Bajaj Introduction 1. Section 14A was first inserted by the Finance Act, 2001. However, same was inserted with retrospective effect from 1-4-1962. The inserted section reads as under:— ’14A. Expenditure incurred in relation to income not includible in total income.—For the purposes of computing the total income under th...
Read MoreIncome Tax - Section 14A was enacted vide Finance Act, 2001 w.r.e.f. 1-4-1962, so that net taxable income is actually taxed and no deduction is allowed against taxable income for expenditure incurred in earning exempt income. It was enacted to overcome the Supreme Court decision in the case of Rajasthan State Warehousing Corporation v. CIT [2000] 242 ...
Read MoreIncome Tax - Allowance of expenditure incurred in relation to exempted income during the assessment or otherwise would be prejudicial to the revenue that’s why Section 14A was introduced by the Finance Act 2001 with retrospective effect from 1st April 1962 in Chapter IV of the Income Tax Act 1961 which inter-alia provides for the disallowance of the...
Read MoreIncome Tax - Section 14A was introduced by the Finance Act, 2001 w.e.f. 1st April 1962 and will, accordingly apply to the assessment year 1962-63 and subsequent years. Till the assessment year 2008-09, there was no standard rule prescribed by the department. Therefore, assessing officers were applying various methods to disallow the expenditure under...
Read MoreIncome 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. ...
Read MoreBharat Serums & Vaccines Ltd. Vs. ACIT (ITAT Mumbai) - Section 55(2)(a) talks of right to manufacture, produce or process any article or thing. Therefore, as per the amended provisions, the right to manufacture/produce/process would be taxable under the head capital gains and cost has to be taken at Rs. Nil. ...
Read MoreGodrej & Boyce Manufacturing Company Limited Vs DCIT & Anr. (Supreme Court of India) - The object behind the introduction of Section 14A of the Act by the Finance Act of 2001 is clear and unambiguous. The legislature intended to check the claim of allowance of expenditure incurred towards earning exempted income in a situation where an assessee has both exempted and non-exempted incom...
Read MoreM/s. Syntholab Chemicals & Research Vs ACIT (ITAT Mumbai) - In this case basic issue to be decided was about the interest payment made by the partnership firm to the partners in light of the provisions of section 14A read with rule 8D of the Rules....
Read MoreM/s. Kalyani Barter Vs I .T.O. (ITAT Kolkata) - Assessing Officer to compute the disallowance as per Rule 8D by taking into consideration only those shares, which have yielded dividend income in the year under consideration. ...
Read MoreRed Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax (ITAT Mumbai) - ITAT followed Delhi High Court in Cheminvest and held that, unless during the relevant previous year, assessee earns any exempt income no disallowance under section 14A r/w rule 8D can be made....
Read MoreCircular 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....
Read MoreNotification 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 ...
Read MoreBharat Serums & Vaccines Ltd. Vs. ACIT (ITAT Mumbai) -
Godrej & Boyce Manufacturing Company Limited Vs DCIT & Anr. (Supreme Court of India) -
M/s. Syntholab Chemicals & Research Vs ACIT (ITAT Mumbai) -
M/s. Kalyani Barter Vs I .T.O. (ITAT Kolkata) -
Red Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax (ITAT Mumbai) -
M/s Shapoorji Pallonji & Co. Ltd Vs. DCIT (ITAT Mumbai) -
Pradeep Khanna Vs ACIT (Delhi High Court) -
M/s Power Grid Corporation of India Ltd. Vs DCIT (ITAT Delhi) -
M/s Thermotech Engineering Vs ACIT (ITAT Pune) -
