No disallowance of expenditure may be made for exempted earnings beneath part 14A r/w rule 8D of IT Guidelines whereas computing e book revenue: ITAT


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The Earnings Tax Appellate Tribunal (ITAT), Chennai held that no expenditure may be allowed for exempted earnings beneath part 14A of the Earnings Tax Act, 1961 and rule 8D of the Earnings Tax Guidelines, 1962, whereas e book revenue beneath part 115JB is calculated. Earnings Tax Act, 1961.

The one subject on this attraction of the assessee, M/s. With regard to the modification order handed by Sundaram Finance Holdings Restricted PCIT u/s. To re-compute the disallowance of bills regarding exempted earnings by invoking the provisions of 263 of the Act. u/s for computing e book revenue beneath r/w rule 8d(2) of part 14a act, earnings tax guidelines, 1962. 115JB of the Act

The evaluation was accomplished by ACIT, u/s. 143(3) of the Act, through which the problem of rejection beneath u/s. 14A of the Act was thought of by the AO and he computed the disallowance at Rs. 76.91 lakhs. Thereafter, PCIT noticed from the perusal of revenue and loss account particulars of miscellaneous bills and computation of taxable e book revenue that no quantity was added to the expenditure incurred for incomes exempted earnings.

In accordance with the PCIT, the AO failed to contemplate the rejection of Rs. Whereas computing the e book revenue beneath 76.91 lakh. 115 JB of the Act and therefore, he issued a present trigger discover to the assessee that the quantity amounting to Rs. 76.91 lakh won’t be charged to tax whereas computing taxable e book revenue. 115JB of the Act. The assessee replied that the assessee-company has not incurred any expenditure regarding exempted earnings because the dividend earnings itself was transferred on account of the accepted scheme of demerger by the Nationwide Firm Regulation Tribunal.

PCIT was not satisfied and as per PCIT, the evaluation order handed by AO u/s. On this level 143(3) of the Act is inaccurate and therefore, he directed the AO to calculate the disallowance of bills of Rs. Whereas computing the e book revenue beneath 76.91 lakh. 115 JB of the Act. Aggrieved, the assessee is in attraction earlier than the Tribunal.

The Division Bench of Mahavir Singh, Vice-Chairman and Deepak P. Ripote, Member Accountant, noticed that “We have now thought of the information and circumstances of the case and perused the legal guidelines of the entire case and we’re of the view that the problem is in favor of the assessee and the Income.” Towards that no disallowance of bills in respect of exempted earnings may be made by invoking the provisions of S. 14A R/W of the Act whereas computing e book revenue beneath Rule 8D. 115JB of the Act.”

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M / s. Sundaram Finance Holdings Restricted Vs. Subsidiary. commissioner of earnings tax

Advocate for the appellant: Shri R Vijayaraghavan

Counsel for the Respondent: Mr. M. Rajani

Quote: 2022 TaxScan (ITAT) 1314





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