In the continuing saga of disallowance u/s 14A and for the purpose of computation of disallowable amount under Rule 8D of Income Tax Rule, two recent judgments- one from Kolkata ITAT and another from Mumbai ITAT- are welcome relief for many tax payers specially those who have to bear the burnt of disallowance under section...
Over zealous tax authorities have many time blindly applied Rule 8D read with provision under section 14A to disallow expenditure more than actual claim by the assessee. This create a bizarre situation where the tax department is disallowing an expense , for which assessee dis not claim any allowance. Gillette Group India (P.) Ltd. vs ACIT 12(1), New Delhi 16 ITR(TRIB.) [...]
The assessee a dealer in shares and securities earned dividend income from shares. The assessee claimed expenditure on brokerage of arranging interest free loan which was for payment of conversion cost of its stock of partly paid shares into fully paid shares. The Assessing Officer disallowed this amount on the ground that it was spent [...]
the Assessing Officer completed assessments without making disallowances under Section 14A even though the assessee had incurred expenditure mainly by way of interest incurred on borrowed funds diverted for investments in securities, shares etc, the income wherefrom were exempt from tax. By virtue of the prohibition contained in the proviso, the Assessing Officer was disabled [...]
The assessee engaged in manufacturing and export of engineering goods. The Assessing Officer disallowed claim for bad debts under section 36(1)(vii) on ground that assessee had claimed deduction under section 80HHC and in such a situation claim for bad debts be hit by Section 14A of the Act. The CIT(A) partly upheld the claim of [...]
The Assessing Officer disallowed interest on the amount of investment in shares on the ground that since dividend income was exempt from tax, section 14A was applicable. On appeal, the Commissioner (Appeals) reversed the said view and held that section 14A could not apply when the assessee had not made any claim for exemption. Tribunal [...]
The assessee-company was engaged in the manufacturing of cycles and parts of two-wheelers in multiple units. It earned dividend income. The Assessing Officer disallowed certain expense under section 14A(3).The CIT (Appeals) although partly upheld the addition, the Tribunal allowed assessee fully on its finding that the entire investment had been made by the assessee out [...]
The assessee claimed deduction on interest paid on borrowed funds for investment in a partnership firm where-from the assessee as partner got share income which was exempt from tax under section 10(2). The Commissioner inovoked action u/s 263 of the Income Tax Act as the claim of deduction made by the assessee and allowed by [...]