Home Highlights February 2011 Year 2011 This

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1. Disallowance u/s 14A - Assessee offered a suo-motto disallowance - By merely stating, that as the assessee was maintaining consolidated accounts, therefore, in the...

2. Disallowance u/s 14A r.w.r. 8D - sourcing of investment from borrowed funds or own funds - investment is taken as stock-in-trade - ex-parte order - additions confirmed.

3. Disallowance u/s 14A - since the shareholders funds are far in excess of the investments, it can be presumed that investments are out of interest free shareholders funds...

4. CENVAT credit - input services - investment cannot be classified as an activity and therefore separate accounts need not be maintained for such activities indulged by...

5. Disallowance u/s 14A - Disallowance made on account of interest expenditure - AO has not made any disallowance on account of interest expenditure u/s 14A of the I.T. Act...

6. Disallowance u/s 14A - There is direct and proximate nexus between the exempted income, which the investments shall genearate and the expenditures directly or indirectly...

7. Disallows of interest expenditure u/s 14A - the disallowance has to be made even in case of strategic investments in the associate company. - AT

8. Disallowance u/s 14A - without establishing any nexus between the expenditure incurred and investment, Rule 8D cannot be invoked - AT

9. Whether investment in unquoted shares be excluded while applying the disallowance provisions of section 14A - Held no - AT

10. Disallowance u/s 14A - Exempted income - proportionate disallowance of interest paid by the banks for investments made in tax free bonds/ securities which yield tax free...