9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (1) TMI 72 - HC - Income TaxAddition u/s 14A r.w.r. 8D - expenditure incurred on earning exempt income - sufficiency of own funds - HELD THAT - The ratio of the judgment of this court in Joint Investments (P.) Ltd. 2015 (3) TMI 155 - DELHI HIGH COURT is simply that the disallowance under Section 14A cannot exceed the exempt income. Net off the interest income (income from other sources) which had no nexus with interest expenditure incurred for earning exempt income - Tribunal has, in our view, rightly deleted the addition by holding that the actual interest expenditure had to be adjusted against the income earned by way of interest. In our view, this is the correct approach. Thus, no question of law arises.
Issues:
The appeal concerns Assessment Year 2009-10. The questions of law proposed for consideration are: (i) Whether the ITAT erred in restricting the addition made u/s 14A of the Act to the exempt income? (ii) Whether the ITAT erred in relying on a previous decision while the facts of the case were different? (iii) Whether the ITAT erred in directing to net off interest income with interest expenditure not related to earning exempt income? Analysis: The appellant/revenue sought to challenge the ITAT's order dated 18.08.2021. Questions (i) and (ii) were found to be covered against the appellant/revenue based on a previous decision. The exempt income earned by the respondent/assessee was Rs. 37,93,374. The AO disallowed a significant amount under Section 14A read with Rule 8D, but the disallowance cannot exceed the exempt income as per a previous judgment. Regarding question (iii), the AO adjusted interest expenditure against the income earned by way of interest, quantifying the interest income at Rs. 11,27,234. The Tribunal rightly deleted the addition, stating that interest earned must be netted off with interest expenditure. This approach was deemed correct, and thus, no legal issue arose for consideration in this regard. The Tribunal's decision to net off the interest income with interest expenditure was upheld, leading to the closure of the appeal and related applications.
|
