Calcutta HC: Demolition Orders Cannot be Challenged under Article 226 if a Statutory Appeal Exists  ||  Kerala High Court: Disability Pension is Payable to Voluntary Dischargee For Service-Related Illness  ||  Calcutta High Court: Partition Decree is Executable Only After Stamp Duty Payment  ||  Calcutta HC: Contempt Court Cannot Grant New Relief Beyond Original Order Once Compliance is Met  ||  Kerala High Court: Intentional Judicial Decisions Cannot be Altered as Clerical Errors under CPC  ||  Supreme Court: Delay In Filing Appeals under Section 74 of 2013 Land Acquisition Act is Condonable  ||  SC: Statutory Authorities may Intervene When Housing Societies Delay Membership Decisions  ||  SC: Quasi-Judicial Authorities Cannot Exercise Review Powers Unless Expressly Granted By Statute  ||  SC: Special Court Cannot Order Confiscation While Appeal Against Attachment Confirmation is Pending  ||  SC: Photocopies are Not Evidence Unless Conditions for Leading Secondary Evidence are Proved    

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