TaxTMI 
TaxTMI 
2025 (11) TMI 410
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....e Assessing Officer completed the assessment u/s 143(3) r.w.s. 144B of the Act on 20.09.2022 assessing the total income at Rs. 40,41,76,243/- after making addition of Rs. 3,05,36,389/- on account of disallowance u/s 14A of the Act and Rs. 50,79,854/- on account of education cess. 3. So far as the disallowance of Rs. 3,05,36,389/- u/s 14A read with Rule 8D of the Income Tax Rules, 1962 is concerned, the Assessing Officer noted that the assessee has earned exempt income of Rs. 4,24,28,153/- which is the share of profit in firm, dividend and interest on PPF. However, the assessee has not disallowed any amount towards expenditure in relation to income which does not form part of total income. According to the Assessing Officer as per provisions of section 14A of the Act, the expenditure in relation to income, which does not form part of total income, cannot be allowed as deduction. He, therefore, confronted the same to the assessee. The assessee submitted that it has declared interest of Rs. 24,37,39,440/- which is much higher than the interest paid for general purpose i.e. Rs. 1,02,24,000/-. Therefore, income from interest is higher by Rs. 23,35,15,440/- and therefore, there is no ....
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....under the provisions of Section 14A of the Income Tax Act, 1961. Without prejudice to ground of appeal no 1 and 2, the appellant hereby prays that the disallowance made under section 14A of the Income Tax Act, 1961 read with rule 8D of the Income Tax Rules, 1962 may please be deleted. 4. On the facts and in the circumstances of the case and in law, the Honourable CIT(A) erred in not restricting the disallowance under section 14A of the Income Tax Act 1961 read with rule 8D of the Income Tax Rules, 1962 to only such expenditure which may have any nexus with earning of exempt income and not extend the disallowance to expenses having direct relation to earning taxable income. Hence, without prejudice to Ground No 1 to 3 of Appeal, appellant requests that the disallowance under section 14A of the Income Tax Act, 1961 read with rule 8D of the income Tax Rules, 1962 may please be restricted to only such expenditure which may have any nexus with earning of exempt income and exclude expenses having direct relation to earning taxable income. 5. The appellant requests that it be appreciated that the disallowance u/s 14A on certain investments far exceeds the amount of exemp....
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....ould be made on account of section 14A read with Rule 8D. Further the Assessing Officer has not recorded any satisfaction. He submitted that since no expenditure was incurred during the year under consideration for earning income which does not form part of the total income, therefore, no disallowance should be made. Relying on various decisions, he submitted that the order of the Ld. CIT(A) should be set aside and the grounds raised by the assessee be allowed. 8. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and Ld. CIT(A). 9. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has earned the following exempt income: i. Profit from Firms and AOP of Rs. 4,10,38,910/- ii. Dividend from shares held with Indian Companies of Rs. 78,350/- iii. Interest on PPF Rs. 1,06,745/- 10. We find the Assessing Officer, invoking the provisions of section 14A read with Rule 8D, made disallowance of Rs. 3,05....
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....Expenses Stamp Paper & Notary 2,990 Expenditure incurred to earn taxable Income, 3 Security Expense 29,500 Expenditure Incurred to earn income from business 4 GST Expense 4,08,175 GST on professional services availed 5 Donation 2.500 Not claimed as an expense in the computation of total income. Refer schedule 24 of computation of income attached herewith in annexure "G". 6 Depreciation 23,25,150 It is an allowance and not expenditure. Not subject to disallowance u/s 14a. (HoshangNanavali vs. ACIT ITA No. 3567/MUM/07) (refer annexure "H") 7 Education Cess 50,79,854 The same has been separately added to the total income during the course of assessment proceedings and the appellant is filing the Form 69 with respect to the same. Hence, it is not to be considered for the purpose of disallowance u/s 14A as it will amount to double disallowance. 8 E - TDS Filing Charges 770 Payment made to TIN facilitation centre for e-TDS returns filing. 9 Legal Expenses 1,04,500 Fees pertain to real estate business of the appellant. 10 Legal Fees 9.19,500 Fees pertain to real estate business of the app....