Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1423 - HC - Income TaxDisallowance under Section 14A - whether the ITAT was correct in affirming the order of CIT(A) which had confined the disallowance under Section 14A - whether the ITAT could read down Rule 8D (2)(ii) of the Income Tax Rules 1962 and whether that was beyond the jurisdiction of the ITAT? - Held that:- In the case in hand, in Note 4 of the computation of income submitted by the Assessee, the total interest debited to the profit and loss account was ₹ 5,52,83,131. There was an entry regarding interest on loans given to two entities. After accounting for the other interest expenditure, the Assessee computed the total interest expenditure which was allowable as ₹ 83,90,178. In the computation drawn up by the Assessee, the entire interest expenditure was incurred for earning either taxable income or exempt income. There was no interest amount which was not directly attributable to either the tax exempt or taxable income. The ITAT, therefore, correctly observed in the present case "no portion of interest really survives for allocation under Rule 8D (2) (ii)". However, as rightly pointed out by the ITAT, since the Assessee did not challenge the order of the CIT (A) to the extent it restricted the disallowance, that part of the order of the CIT (A) remained. The point concerning Rule 8D (2) (iii) does not appear to have been urged by the Revenue before the ITAT and therefore not considered by it. In any event that does not affect the interpretation of Rule 8D (2) (ii) which was the only issue considered by the ITAT in the impugned order. For the aforementioned reasons, the impugned order of the ITAT does not call for any interference - Decided in against revenue.
|