2020 (11) TMI 565 - HC - Income Tax

Gujarat HC Confirms ITAT's Decision to Limit Disallowance u/s 14A to Rs. 50,000 for AY 2013-14.

The Gujarat HC dismissed the Revenue's appeals challenging the ITAT's decision to limit the disallowance under Section 14A r.w. Rule 8D to Rs. 50,000 for ... Disallowance u/s.14A r.w. Rule 8D being the exempt income - HELD THAT:- The question proposed by the Revenue is no longer res integra relying on cases Vision Finstock Limited [2017 (7) TMI 1277 - GUJARAT HIGH COURT], [2018 (7) TMI 1246 - SC ORDER], Gujarat Fluorochemicals Limited [2019 (7) TMI 541 - GUJARAT HIGH COURT] - Appeal dismissed. Issues:1. Appeal against orders passed by the Income Tax Appellate Tribunal, Ahmedabad 'B' Bench for the A.Y. 2013-14.2. Disallowance of Rs. 17,02,77,850 made under section 14A r.w. Rule 8D to the extent of Rs. 50,000.Analysis:The High Court of Gujarat heard two tax appeals under Section 260A of the Income Tax Act, 1961, filed by the Revenue against orders of the Income Tax Appellate Tribunal, Ahmedabad 'B' Bench dated 30th January, 2020 for the A.Y. 2013-14. The Revenue questioned the Tribunal's decision to limit the disallowance of Rs. 17,02,77,850 made under section 14A r.w. Rule 8D to just Rs. 50,000, which was the exempt income. The Revenue argued that the Tribunal erred in law and on facts in this regard. However, the Court noted that the issue raised by the Revenue had already been addressed in various precedents, including decisions of the Court, the Supreme Court, and other High Courts. The Court referred to specific cases such as Commissioner of Income Tax vs. Vision Finstock Limited and Commissioner of Income Tax-I vs. Majestic Auto Limited to support its decision. Ultimately, the Court dismissed both appeals, upholding the Tribunal's decision and the precedent set by previous judgments.