Section 14A - Page 30

Disallowance under section 14A and for expenses for increase in share capital not attracted in the case of life insurance companies

Birla Sun life Insurance Company Ltd. Vs. DCIT (ITAT Mumbai)

In a recent ruling, ITAT Mumbai held that no disallowance under section 14A of the Income-tax Act, 1961 is attracted in the case of a life insurance company. The Tribunal also held that disallowance of software expenses and of expenses incurred for increase in authorised share capital, is not attracted in view of the special provisions o...

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Sub-sections (2) and (3) of sec. 14A and Rule 8D are constitutionally valid

Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (Bombay High Court), ITA No. 626/2010

Godrej & Boyce Mfg. Co. Ltd. Vs DCIT,, ITA 626/2010 and W.P. 758/2010 dated 12 August 2010, - Bombay High Court rules on prospective operation of Rule 8D and upholds the constitutional validity of sub-sections (2) and (3) of section 14A and Rule 8D. ...

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Deduction for interest on Loan fund utilised in share purchases allowable only if the Shares are held as stock-in-trade and not as investment: HC

CIT Vs. Leena Ramachandran (Kerala High Court)

CIT vs. Leena Ramachandran (Kerala High Court):-I-T- Sec 14A - assessee can claim deduction of interest paid on borrowed funds utilised for acquisition of shares only if shares are held as stock-in-trade and not investment: HC...

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Rule 8D applies from AY 2008-09, for earlier years disallowance can be worked on reasonable basis

Godrej & Boyce Vs. DCIT (Bombay High Court)

Godrej & Boyce vs. DCIT (Bombay High Court) Bombay HC held Rule 8D r.w. S. 14A (2) is not arbitrary or unreasonable and Rule 8D is not retrospective and applies from AY 2008-09, for earlier disallowance can be worked on reasonable basis...

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Supreme Court upheld Dividend-Stripping Law

CIT Vs. Walfort Share & Stock Brokers (Supreme Court of India)

Wallfort Shares & Stock Brokers, a Five Member Special Bench of the Tribunal (96 ITD 1 (Mum) (SB)) and the Bombay High Court (310 ITR 421 (Bom)) held that the ‘loss’ incurred by an assessee in ‘dividend-stripping’ transactions cannot be disallowed on the ground that it was ‘tax-planning‘. The department’s SLP against the sai...

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If assessee’s income not exempt u/s. 10 rather same was eligible for deduction u/s. 80P, assessee’s case was not hit by provisions of section 14A

Assistant Commissioner of Income Tax Vs Kribhco (ITAT Delhi)

ACIT Vs. Kribhco (ITAT Delhi) - Terms 'exempt income' and 'deduction from income' are two different propositions and, therefore, where assessee's income was not exempt under section 10 rather same was eligible for deduction under section 80P, assessee's case was not hit by provisions of section 14A....

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Summary of points to be discussed on Disallowance u/s. 14A read with. Rule 8D & Discussion on Daga Capital Judgment of Mumbai ITAT

Section 14A and Daga Capital can not put assessee in worse position. In other words section 14A disallowance under Rule 8D can not exceed original disallowance made at the time of assessment....

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Posted Under: Income Tax |

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

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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Recent judgement of Punjab & Haryana HC on disallowance U/s. 14A of I.T. Act, 1961

It was held in this case that where it is found that for earning exempted income no expenditure has been incurred, disallowance under section 14A cannot stand. In view of the finding of the Tribunal, it is clear that the expenditure on interest was set-off against the income from interest and the investment in the share and funds was out ...

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Posted Under: Income Tax |

Rule 8D of the Income Tax Rules – Whether prospective or retrospective?

Section 14A was introduced in the Income Tax Act, 1961 by the Finance Act 2001 with retrospective effect from 1st April 1962. The intent of introducing this section was reiteration of the well settled legal principle that when an assessee incurs any expenditure in relation to income which is not liable to tax under the Act, he would ideal...

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Posted Under: Income Tax |

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May 2020