Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: TDS :: empanelment :: due date for vat payment :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: cpt :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India
 
 
From the Courts »
 ACIT vs. Veer Gems (ITAT Ahmedabad)
  CIT vs. Subhash Vinayak Supnekar (Bombay High Court)
 Pr. Commissioner Of Income Tax-06 Vs. M/s N.C Cables Ltd.
 BDR BUILDERS AND DEVELOPERS PVT. LTD. Vs. THE ASSISTANT COMMISSIONER OF INCOME TAX & ANR.
 Sports Infratech Pvt. Ltd. & Anr. Vs. Deputy Commissioner Of Income Tax (Hqrs)
 Delhi High Court interprets applicability of amendments to Arbitration Act
  M/s Skin Institute And Public Services Charitable Trust Vs. Commissioner Of Income Tax (Exemption)
 M/s Skin Institute And Public Services Charitable Trust Vs. Commissioner Of Income Tax (Exemption)
 ITO vs. Emami Paper Mills Ltd (ITAT Kolkata)
 Surya Prakash Toshniwal HUF vs. ITO (ITAT Kolkata)
 CIT vs. Subhash Vinayak Supnekar (Bombay High Court)

ITO vs. Karnavati Petrochmem Pvt. Ltd (ITAT Ahmedabad)
August, 02nd 2013

S. 14A/ Rule 8D: Interest expenditure has to be netted against interest income and only the difference, if any, can be considered for disallowance

In AY 2008-09, the assessee invested Rs. 95 lakhs in shares on which it earned Rs. 300 as dividend. The AO applied Rule 8D and made a disallowance of Rs. 15 lakhs. The assessee claimed that no expenditure had been incurred to earn the dividend income on the basis that while the interest expense was Rs. 1.83 crore, the interest income was Rs. 1.86 crore and there was a net surplus interest income of Rs. 3.79 lakh. The CIT(A) held that the AO had not established a nexus between the expenditure incurred and the tax free income and that as the assessee had net positive interest income, there could be no disallowance of the interest expenditure u/s 14A read with Rule 8D. He sustained the disallowance at 0.5% of the average investment. On appeal by the department HELD dismissing the appeal:

No nexus has been established by the AO between the expenditure incurred by the assessee and the tax free income earned by him. Further, as the interest income was more than interest expense and the assessee was having net positive interest income, the interest expenditure cannot be considered for disallowance u/s 14A and Rule 8D (Trade Apartment (ITAT Kol) & Morgan Stanley (ITAT Mum) (both included in the file) followed)

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Reengineering Software Re-engineering Software Reverse Engineering Software Reverse Development Software Change Modulation Software Conversion Software Re-creation Software Re-development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions