rule 8D

Section 14A disallowance even in absence of any exempt income

Income Tax - Clarification in respect of disallowance under section 14A in absence of any exempt income during an assessment year Section 14A of the Act provides that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income that does not form part of the total income as per the provisions […]...

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Section 14A disallowance- South Indian Bank Ltd Vs. CIT (Supreme Court)

Income Tax - The issue before the Hon’ble Supreme Court (SC) was whether section 14A of the Income-tax Act, 1961 (the Act) enables the Department to make disallowance on expenditure incurred for earning tax-free income, where the assessee does not maintain separate accounts for the investments and other expenditure incurred for earning the tax-free ...

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Disallowance under section 14A: Another instance where section is not invoked

Income Tax - The ever debatable ‘Disallowance under section 14A’ (read with Rule 8D (2) now has again found a different horizon wherein the disallowance is not attracted (partially). The below mentioned case depicts a situation where interest free funds obtained by the assessee, a real estate developer, far exceeds the investments made by ...

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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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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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Amendment of Section 14A For Removal of Doubts Is Held to Be Prospective Subject to Final Decision by SC

PCIT Vs Era Infrastructure (India) Ltd. (Delhi High Court) - Delhi high court negating dept stand about  retrospective amendment plea for sec 14A explanation added by finance act 2022 in authors opinion it should  ably address the much created confusion from revenue side....

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Section 14A applicable to strategic investment generating exempt dividend income

ACIT Vs Assam Bengal Carriers (ITAT Kolkata) - When strategic investment made in shares generates dividend income which is not taxable, section 14A becomes applicable...

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Section 154 cannot be invoked for Applicability of section 14A to section 115JB provisions

DCIT Vs Jammu Pigments Ltd. (ITAT Delhi) - DCIT Vs Jammu Pigments Ltd. (ITAT Delhi) Assessing Officer initiated proceeding under section 154 of the Act to make the disputed disallowance while computing the book profit and ultimately did so. Therefore, it is evident, the 154 proceeding was at the behest of the Revenue audit. Applicability of ...

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Section 14A disallowance- Investments yielding tax free dividend income to be taken

Poonawalla Finance Pvt. Ltd. Vs DCIT (ITAT Pune) - Poonawalla Finance Pvt. Ltd. Vs DCIT (ITAT Pune) The only issue pressed is about restricting the addition under Rule 8D of the Income-tax Rules, 1962 by considering only such investments which yielded tax free dividend income. Hon’ble Delhi High Court in ACB India Ltd. vs. CIT (2015) 374 ITR 1...

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Section 14A disallowance cannot be added to net profit for computing book profits U/s. 115JB

Karnataka State Industrial And Infrastructure Development Corporation Ltd. Vs DCIT (Karnataka High Court) - Karnataka State Industrial And Infrastructure Development Corporation Ltd. Vs DCIT (Karnataka High Court) This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the assessee. The subject matter of the appeal per...

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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"

Amendment of Section 14A For Removal of Doubts Is Held to Be Prospective Subject to Final Decision by SC

PCIT Vs Era Infrastructure (India) Ltd. (Delhi High Court)

Delhi high court negating dept stand about  retrospective amendment plea for sec 14A explanation added by finance act 2022 in authors opinion it should  ably address the much created confusion from revenue side....

Read More

Section 14A applicable to strategic investment generating exempt dividend income

ACIT Vs Assam Bengal Carriers (ITAT Kolkata)

When strategic investment made in shares generates dividend income which is not taxable, section 14A becomes applicable...

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Section 154 cannot be invoked for Applicability of section 14A to section 115JB provisions

DCIT Vs Jammu Pigments Ltd. (ITAT Delhi)

DCIT Vs Jammu Pigments Ltd. (ITAT Delhi) Assessing Officer initiated proceeding under section 154 of the Act to make the disputed disallowance while computing the book profit and ultimately did so. Therefore, it is evident, the 154 proceeding was at the behest of the Revenue audit. Applicability of section 14A read with Rule 8D to [&helli...

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Section 14A disallowance- Investments yielding tax free dividend income to be taken

Poonawalla Finance Pvt. Ltd. Vs DCIT (ITAT Pune)

Poonawalla Finance Pvt. Ltd. Vs DCIT (ITAT Pune) The only issue pressed is about restricting the addition under Rule 8D of the Income-tax Rules, 1962 by considering only such investments which yielded tax free dividend income. Hon’ble Delhi High Court in ACB India Ltd. vs. CIT (2015) 374 ITR 108 (Del) has held that the […]...

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Section 14A disallowance cannot be added to net profit for computing book profits U/s. 115JB

Karnataka State Industrial And Infrastructure Development Corporation Ltd. Vs DCIT (Karnataka High Court)

Karnataka State Industrial And Infrastructure Development Corporation Ltd. Vs DCIT (Karnataka High Court) This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment Year 2008-09. Th...

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Income from contract farming cannot be treated as agricultural income

Namdhari Seeds Pvt. Ltd. Vs DCIT (ITAT Bangalore)

Income from contract farming done by assessee cannot be treated as agricultural income and that the assessee is not eligible to claim exemption under section 10(1) in respect of such income....

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Section 14A disallowance even in absence of any exempt income

Clarification in respect of disallowance under section 14A in absence of any exempt income during an assessment year Section 14A of the Act provides that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income that does not form part of the total income as per the provisions […]...

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Adjustment of section 14A disallowance cannot be made while computing Section 115JB Book Profits

J. K. Fenner (India) Limited Vs JCIT (ITAT Chennai)

ITAT held that adjustment of disallowance u/s 14A could not be made while computing Book Profits u/s 115JB as per the decision of Special Bench of Delhi Tribunal in ACIT V/s Vireet Investment (P) Ltd. (165 ITD 27) as well as the recent decision of Hon’ble Karnataka High Court in Sobha Developers Ltd. V/s DCIT (2021; 125 com 72)....

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Section 14A disallowance needs to be re-worked based on investments which yielded tax free income

Zuari Investments Ltd. Vs ITO (ITAT Delhi)

Zuari Investments Ltd. Vs ITO (ITAT Delhi) As far as the alternate submissions of the Learned AR in working the disallowance u/s 14A only after considering the investment which have yielded tax free income is concerned, we find force in the submission of Learned AR. We find that Hon’ble Delhi High Court in the case […]...

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Consider only investments which actually yielded dividend income for section 14A: ITAT Kolkata

DCIT Vs Kesoram Industries Ltd. (ITAT Kolkata)

AO to consider only the opening and closing value of those investments which actually yielded dividend income to the assessee during the relevant year for the purposes of computing the disallowance under section 14A of the Act read with Rule 8D(2)(iii)....

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