Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (5) TMI 1363 - AT - Income TaxIssues Involved: The judgment involves the issue of disallowance u/s 14A of the Income-tax Act, 1961. Disallowance u/s 14A: The appeal was filed by Quantum Advisors ESOP Trust against the appellate order passed by the National Faceless Appeal Centre, Delhi, where the disallowance u/s 14A was partly allowed. The assessee contended that the disallowance should be restricted to the extent of exempt income of Rs. 3,00,000. The Assessing Officer had made a disallowance of Rs. 28,43,433, which was challenged by the assessee. The Hon'ble Bombay High Court decision was cited in support of the contention that disallowance in excess of exempt income is not sustainable under Section 14A. The Tribunal observed that it is a settled position of law that disallowance exceeding exempt income cannot be upheld under Section 14A. Citing various High Court judgments, including the Hon'ble Bombay High Court, the Tribunal allowed ground no. 1.4 of the appeal, thereby restricting the disallowance to the extent of exempt income. General: The assessee, a Trust created for employees' stock option plans, had earned dividend income of Rs. 3,00,000 claimed as exempt under Section 10(34) of the Income-tax Act, 1961. The Assessing Officer questioned the provisions of Section 14A due to total expenditure debited by the assessee. The Assessing Officer computed a disallowance of Rs. 31,51,890, which was restricted to the claimed expenditure of Rs. 28,43,433. The appellate order confirmed the disallowance, leading the assessee to appeal. The Tribunal, after considering the contentions and relevant case laws, allowed ground no. 1.4 of the appeal, restricting the disallowance to the extent of exempt income. All other grounds were dismissed, and the appeal was partly allowed.
|