Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 998 - AT - Income TaxDisallowance u/s 14A r.w.s. 8D - Held that:- In the given case, where the assessee has earned exempted income and also has a substantial investments in shares the provisions of section 14A of the Act for disallowance of expenditure incurred in relation to income earning dividend income is clearly attracted. We find that ld. Assessing Officer has applied the gross amount of interest expenditure of ₹ 75,53,433/- in the formula for working out proportionate disallowance of interest. In the present case, we find that assessee has also earned interest income during the year. In various decisions of Co-ordinate Benches it has been repeatedly held that at the time of calculation of disallowance of Sec.14A of the Act net interest expenditure (i.e. gross interest paid minus interest received) should be used in the formula for calculating proportionate disallowance u/s 14A of the Act. Further we also observe that ld. AR has not brought on record audited financial statements, details of investment, partners’ capital account, indirect income earned, which could help to calculate the actual disallowance u/s 14A of the Act. We, therefore, set aside this issue to the file of ld. Assessing Officer to recalculate the disallowance u/s 14A of the Act by using net interest paid figure at the place of gross interest paid during the year in the formula. Needless to mention that ld. Assessing Officer will provide reasonable opportunity of being heard to the assessee to produce all the necessary documents/evidences etc. in support of his claim. This ground of Revenue is allowed for statistical purposes.
|