Tally for CAs in Industry Silver Edition (Single User) Tally Renewal (Auditor Edition) Need Tally for Clients? (Tie-up with us!!!)
« ITAT-Constitution of Benches »
 ITAT grants relief to Atos India Assessment framed for Non-Existent Authority is null & Void
 Capital Gain Deduction claim can be invoked during Re-Assessment if Assessee failed to file Returns: ITAT
 Vodafone Idea Limited is not required to Deduct Tax u/s 194H on Prepaid SIM Cards: ITAT
 Activities performed in ‘Virtual Classrooms’ also comes under the Definition of ‘Education’: ITAT grants relief to NIIT Foundation
 Scrutiny Assessment without Notice is Defective in Law: ITAT
 No Exempt Income Received or Receivable, No Disallowance under Section 14A: ITAT
 Bonus allocated to Policyholders is not Taxable as Income from Insurance Company: ITAT
 Yahoo gets Income Tax Relief from ITAT
 ITAT upholds Addition of 12.5% for taking Bills without Delivery of Goods
 No Capital Gain Tax on Amount Received by Retiring Partner: ITNo Capital Gain Tax on Amount Received by Retiring Partner: ITATAT Read more at: https://www.taxscan.in/no-capital-gain-tax-on-amount-received-by-retiring-partner-itat/56137/
 No Section 194C TDS on Reimbursement of Vehicle Expenses: ITAT
 Companies can’t evade tax on profit from overseas office after ITAT ruling
 CBDT Circular or Instructions can’t be inconsistent with SC Decisions: ITAT
 ACIT vs. Reliance Jio Infocomm Ltd (ITAT Mumbai)
 Six Tata trusts to challenge tax department order in tribunal

No Exempt Income Received or Receivable, No Disallowance under Section 14A: ITAT
May, 16th 2020

The Income Tax Appellate Tribunal (ITAT), Mumbai held that Section 14A of the Income Tax Act, 1961 will not apply if no exempt income is received or receivable during the relevant previous year.

The assessee raised the grievance that the Assessing Officer has erred in restricting the disallowance under section 14A of the Income Tax Act, 1961, without appreciating the fact that the appellant company has not earned any tax-exempt income during the relevant assessment year.



However, the assessing officer contended that the CIT(A) erred in deleting the disallowance of Rs 3,35,40,340 under section 8D(2)(ii) without appreciating the fact that the assessee could not link its investments with its own funds.

The tribunal consisting of President, Justice P P Bhatt and vice President,  Pramod Kumar while elaborating on Section 14A of the Act said that for the purposes of computing the total income under Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction.



There was no tax-exempt income in the relevant previous year, we hold that no disallowance under section 14A could have been made, on the facts of this case and in the year before us. We, therefore, uphold the plea of the assessee and delete the disallowance of Rs 80,51,200 sustained by the CIT(A). Once we uphold the plea of the assessee that no disallowance under section 14A could have been made on the facts of this case, grievances of the Assessing Officer, against learned CIT(A)’s partially deleting the disallowance under section 14A, become infructuous. The grievance of the assessee is thus upheld and grievances of the Assessing Officer are dismissed as infructuous,” the tribunal said.


HEADLINES | INCOME TAX | TOP STORIES No Exempt Income Received or Receivable, No Disallowance under Section 14A: ITAT [Read Order] May 15, 2020 5:56 pm| By : Mariya Paliwala The Income Tax Appellate Tribunal (ITAT), Mumbai held that Section 14A of the Income Tax Act, 1961 will not apply if no exempt income is received or receivable during the relevant previous year. The assessee raised the grievance that the Assessing Officer has erred in restricting the disallowance under section 14A of the Income Tax Act, 1961, without appreciating the fact that the appellant company has not earned any tax-exempt income during the relevant assessment year. However, the assessing officer contended that the CIT(A) erred in deleting the disallowance of Rs 3,35,40,340 under section 8D(2)(ii) without appreciating the fact that the assessee could not link its investments with its own funds. The tribunal consisting of President, Justice P P Bhatt and vice President,  Pramod Kumar while elaborating on Section 14A of the Act said that for the purposes of computing the total income under Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction.

Read more at: https://www.taxscan.in/no-exempt-income-received-or-receivable-no-disallowance-under-section-14a-itat/57860/

Home | About Us | Terms and Conditions | Contact Us
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting