2022 (10) TMI 613 - SCH - Income Tax

Disallowance u/s 14A - sufficiency of own funds - HELD THAT - The legal issue relating to disallowance u/s 14A of the Income Tax Act, 1961 would be covered against the Revenue in view of judgment of this Court in South Indian Bank Ltd. v. Commissioner Of Income Tax 2021 (9) TMI 566 - SUPREME COURT Recording the aforesaid the appeal is dismissed without any order as to costs.

Summary

Issues:
1. Disallowance under Section 14A of the Income Tax Act, 1961.

Analysis:

Issue 1: Disallowance under Section 14A of the Income Tax Act, 1961

The Supreme Court, comprising Hon'ble Mr. Justice Sanjiv Khanna and Hon'ble Mr. Justice J.K. Maheshwari, considered the appeal in Civil Appeal No. 1926 of 2014, which originated from a judgment of the Gujarat High Court. The Court noted that based on the factual findings by the High Court, the legal issue concerning disallowance under Section 14A of the Income Tax Act, 1961, would be decided against the Revenue. The Court referred to its previous judgment in 'South Indian Bank Ltd. v. Commissioner Of Income Tax' [(2021) 10 SCC 153], indicating that the legal position on this matter was already settled. Consequently, the appeal was dismissed without any order on costs. Any pending applications were also disposed of in light of this decision.

Additionally, the Supreme Court mentioned two Special Leave Petitions (SLPs) - SLP(C) No. 28946/2019 and SLP(C) No. 844/2021 - originating from judgments of the Bombay High Court. These matters were scheduled for a re-listing on 7th September 2022, indicating that further proceedings were to take place regarding these specific cases.

In conclusion, the Supreme Court's judgment clarified the legal stance on disallowance under Section 14A of the Income Tax Act, 1961, based on established precedents, and provided directions for the pending cases from the Bombay High Court for future consideration.