Supreme Court: Breach of Contract is Not Cheating Unless Fraud Existed From the Outset  ||  Supreme Court: Specific Performance of an Agreement to Sell May be Denied After a Long Delay  ||  Supreme Court: Section 498A IPC Applies to Live-In Relationships in Nature of Marriage  ||  Supreme Court Awards Rs.83.38 Lakh to Child Left Paralysed, Stressing Impact on the Victim’s Future  ||  J&K and Ladakh High Court: Private Trust Cannot Oppose Wakf Takeover Without Legal Authority  ||  P&H HC: Courts Cannot Grant Protection to a Minor’s Live-In Relationship Prohibited By Law  ||  Chhattisgarh High Court: NEET OMR Tampering Allegations Cannot Rest on Mere Suspicion  ||  Allahabad High Court Upholds Conviction, Says a Reliable Dying Declaration Alone Can Sustain Guilt  ||  Bombay HC Criticises ITAT for Delays in Pronouncing Orders Beyond 90-Day Limit  ||  P&H High Court Criticises Punjab For Spending on Freebies and Ads While Delaying Employee Dues    

Bharat Electronics Limited vs. Assistant Commissioner Of Income Tax - (Income Tax Appellate Tribunal) (31 Aug 2023)

While calculating disallowance under Section 14A of the IT Act, only investment that have generated exempt income should be taken into consideration

MANU/IL/0264/2023

Direct Taxation

Present appeal at the instance of the assessee is directed against CIT(A)'s order passed under Section 250 of the Income Tax Act, 1961. The solitary issue raised is whether CIT(A) is justified in confirming the addition made by the AO amounting to Rs. 4,69,055 under Section 14A of the Act.

Only investment yielding non-taxable income has to be considered and not all the investments. This proposition has been held correct by the Hon'ble Delhi High Court in the case of ACB India Ltd., Vs. ACIT. The Hon'ble Delhi High Court had held that, for the purpose of Section 14A, instead of taking into account total investment, the investment attributable to dividend (exempt income) was only required to be adopted and thereafter the disallowance was to be arrived.

While calculating disallowance under Section 14A of the Act, only investment that have generated exempt income should be taken into consideration.Before concluding, it is also to be mentioned that explanation inserted by Finance Act, 2022, has been held to be prospective by the judgment of the Delhi High Court in the case of PCIT Vs. Era Infrastructure (India) Ltd. In light of the aforesaid reasoning and judicial pronouncements, the disallowance made under Section 14A of the Act, amounting to Rs.4,69,055 is deleted. Appeal filed by the assessee is allowed.

Tags : ASSESSMENT   ADDITION   DISALLOWANCE  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved