Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
CGST - Acts + GST Rates GST Ntf. GST Forms GST - Manual GST - FAQ State GST Acts SGST Ntf. I. Tax Manual
Extracts
Home List
← Previous Next →

S.14A may not be applicable even if some dividend is earned incidentally when commercially expedient investment in shares for business purposes is made

Income Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 7-11-2016 - Recent judgment on issue: Assistant Commissioner of Income-tax, Circle-36, Kolkata Versus Shri Rikhab Chand Jain and Vica-Versa 2016 (7)613 - ITAT KOLKATA 2016 (7)613 Cases referred to their in: Hero Cycles (P.) Ltd. Versus Commissioner of Income-tax (Central) , Ludhiana - 2015 (11)1314 - SUPREME COURT OF INDIA on issue of business purposes / expediency and non-business purposes. SA BUILDERS LTD. Versus COMMISSIONER OF INCOME-TAX - 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

UPREME COURT on issue of business purposes / expediency and non-business purposes. Madhav Prasad Jatia Versus Commissioner of Income-Tax, Uttar Pradesh - 1979 (4)2 - SUPREME Court - on issue of business purposes / expediency and non-business purposes. Commissioner of Income-Tax, West Bengal I Versus Birla Cotton Spinning 1971 (8)9 - SUPREME Court - on issue of business purposes / expediency and non-business purposes. Commissioner Of Income-Tax, Kerala Versus Malayalam Plantations Limited - 1964 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing of the judgment we find the following important aspect: When investment has been made for business purposes/ strategic investment from which other taxable income has also been derived, S. 14A is not applicable. When investment in shares has been made out of own funds and not out of borrowed funds, a portion of interest expenditure cannot be disallowed by invoking S.14A merely because dividend has been earned incidentally. What is relevant for consideration of allowability of interest on capi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not constitute total income under the Act. Dividend which is taxed u/s 115O and 115R is not an income not taxable under the Act. Therefore, S.14A is not applicable in relation to dividend earned by shareholders or unit holders, in respect of which tax is levied as finally collected tax under simplified scheme of tax on income by way of dividend. Secondly, declaration of dividend is totally under discretion of management of company/ mutual fund. Dividend is earned only if a dividend is declared. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction (1) these are given in first column and in second column significance is discussed: Words uses Significance total income under this Chapter, This expression is used in relation to total income of assessee which is computed as per provisions of the Chapter IV that is Sections 14- 59. which does not form part of the total income under this Act. Here 'total income under this Act' means any income on which tax is not imposed under the entire Act whether directly or indirectly. The Asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to be computed under Chapter IV. We find that the second expression 'total income under this Act' used in sub-section (1) and (2) both, this expression means chargeable or taxable income under the entire Income-tax Act. If it was intended only in relation to the assessee whose income is to be computed, then similar expression could have been used that is 'which does not form part of total income under this chapter or 'which does not form part of total income of assessee' in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

collected is nothing but tax on income. Therefore, it cannot be said that such income does not form part of total income under this Act. Once it is found that dividend forms part of 'total income under this Act', and a taxable income is computed, and tax is imposed and collected, then S.14A will not at all be applicable in relati)on to such income which has already been include in taxable income in some other scheme of imposing tax on income. Similar is case in relation to share in profi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version