Disallowance under Section 14A of Income TAx Act, 1961
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Income Tax : Clarification in respect of disallowance under section 14A in absence of any exempt income during an assessment year Section 14A o...
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 Depart...
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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 whethe...
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Income Tax : Amendments to Section 14A to provide that (i) dividend received after suffering dividend-distribution tax and share income from fi...
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Income Tax : ITAT Pune held that the DTAA does not get triggered at all when a domestic company pays DDT u/s. 115O of the Income Tax Act. In nu...
Income Tax : The assessee had filed return of income of Rs.92,06,590 which was selected for complete scrutiny and during the course of assessme...
Income Tax : ITAT Ahmedabad held that disallowance of interest under section 14A unjustified as assessee’s own funds are far in excess of the...
Income Tax : ITAT Hyderabad held that as per the provisions of section 115VG of the Income Tax Act, once the assessee opts for the Tonnage Tax ...
Income Tax : ITAT Delhi held that disallowance u/s. 14A of the Income Tax Act unjustified as sufficient interest free funds were available for ...
Income Tax : 2) The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts,...
Income Tax : Circular No. 5/2014-Income Tax Central Board of Direct Taxes, in exercise of its powers under section 119 of the Act hereby clari...
Income Tax : INCOME TAX NOTIFICATION NO-45/2008, DT: March 24, 2008 Method for determining amount of expenditure in relation to income not incl...
Income Tax : The provisions of Sections 144-A and 144-B of the Income-tax Act have come into force with effect from 1st January 1976. Instructi...
It has been observed that for the purpose of disallowance of expenditure under section 14A of the Income-Tax Act, 1961 (the Act), in respect of income exempt from tax, the Assessing Officers (AOs) have been following a totally erroneous method of straight away applying rule 8D of the Income-Tax Rules, 1962 (the Rules), without considering the correctness of the claim made by the assessee in respect of the expenditure incurred in relation to such income.
i. There is no interest expenses relatable to exempt investment. Assessee has made investment in the heads of tax free income. Investment in equity shares, insurance policies etc. are related to earlier years and were invested from the own capital funds. Therefore that investment is not related to this year. Hence, provisions of sec 14A […]
1. IMPLEMENTATION OF IND-AS AND THEIR IMPACT ON TAXABLE INCOME IND-AS (Indian version of IFRS) accounting standards are being implemented with effect from previous year commencing on 1st April, 2015 based on fair value, permitting recognition of unrealised income and anticipated unrealised losses and various other implications on book profit, turnover as well as income […]
Amendments to Section 14A to provide that (i) dividend received after suffering dividend-distribution tax and share income from firm suffering tax in the firm’s hands will not be treated as exempt income and no expenditure will be disallowed as relatable to them; (ii) expenditure disallowed shall not exceed the amount claimed. Recommendation for issue of […]
The ITAT bench of Pune in the case of M/s Thermotech Engineering held that where the assessee has earned exempt income and incurred expenditure by way of interest which is not directly attributable to any particular income
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 real objective of statutory provisions through latest judicial pronouncements.
In the case of M/s Chhaganlal Khimji & Co. Vs. ACIT Mumbai Bench of ITAT have held that that no disallowance can be made u/s.14A when there is no exempt income. ITAT relied upon the judgments of various courts in coming to the conclusion.
. CIT Vs. Bharti Overseas Pvt. Ltd. (Delhi High Court) As far as Rule 8D (2) (i) is concerned, the AO has necessarily to record that he is not satisfied with the correctness of the claim of the expenditure made by the Assessee in relation to the income which does not form part of the total income.
ITAT Mumbai held In the case of DCIT vs. Viraj Profiles Ltd. that section 14A provides that it mandates disallowance of expenditure ‘in relation’ to the income which does not form part of the total income while clause (f) in explanation1 to Section 115JB (2) mandates disallowance of expenditure ‘relatable’
ITAT Delhi held In the case of M/s. Mohair Investment and Trading Company (P) Ltd. vs. DCIT that it is clear that the present issue, related to application of section 14A, especially in relation to shares held as trading assets
