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2016 (8) TMI 1538 - AT - Income TaxDisallowance u/s 14A on account of ‘business portfolio’ - HELD THAT:- The situation that has emerged before us is that in view of the decision of the Tribunal of earlier years as well as judgments of Hon’ble Bombay High Court in the case of India Advantage Securities Ltd. [2015 (6) TMI 140 - BOMBAY HIGH COURT] and HDFC Bank Ltd. v. DCIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] and judgment of CCI Limited [2012 (4) TMI 282 - KARNATAKA HIGH COURT], the disallowance u/s 14A should be deleted for both the portfolios i.e. ‘investment’ as well as ‘business’. The only hitch with regard to disallowance made under ‘business portfolio’ is that assessee had himself made a voluntary disallowance. It is well settled position of law that taxable income of an assessee has to be computed strictly in accordance with the provisions of Income Tax Act, 1961 as explained by the courts from time to time. Thus, disallowance/additions if any can be made only in accordance with law. Neither any item of receipts can be brought to tax nor can any expenditure be allowed/disallowed, merely on the basis of consent or acquiescence or waiver of any party or otherwise. It could be done only in accordance with the provisions of law. The circular has been taken note of by many courts in their judgments while deciding the identical issues wherein taxpayers have paid more tax than actually due as per law. In this regard, we shall also like to make a mention of Article 265 of Constitution of India which says that ‘no tax can be collected except by the authority of law’. Thus, in the given facts of the case before us and the aforesaid legal position and we find that the disallowance made by the AO u/s 14A on account of ‘business portfolio’ deserves to be deleted in total and therefore, we direct the AO to give relief accordingly. Grounds raised by the assessee are allowed.
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