SlideShare une entreprise Scribd logo
1  sur  17
DISALLOWANCE U/S 14A
SOUTH INDIAN BANK LTD.
V.
COMMISSIONER OF INCOME-TAX
[2021] 130 TAXMANN.COM 178 (SC)
.
LEGENDS USED
AO Assessing Officer
CIT Commissioner of Income Tax
CIT(A) Commissioner of Income Tax (Appeals)
HC High Court
ITAT Income Tax Appellate Tribunal
SC Supreme Court
SLR Statutory liquidity Ratio
PRESENTATION SCHEMA
Facts of the Case Issues & Orders of the Case Contention of the Parties
Observations by Honourable SC Conclusion
FACTS OF THE CASE
GENERAL FACTS
Assessee
• The assessees are scheduled banks and in course of their banking business
• Engage in the business of investments in bonds, securities and shares which earns
interest and dividend on the same.
Subject
mater
• Scheduled banks earned income from investments made in tax-free securities.
• Interest free funds available with assessees were larger than investments made in said
securities.
Facts
• The case pertains to AY 2011-12
• Separate accounts were not maintained by assessee for investments and other
expenditures incurred for earning tax-free income.
• Therefore, proportionate disallowance on expenditure could not be made u/s 14A
ISSUES AND ORDERS OF THE
CASE
ISSUES
Whether Section 14A enables the
Department to make disallowance
on expenditure incurred for earning
tax free income in cases where
assessees, do not maintain separate
accounts for the investments and
other expenditures incurred for
earning the tax-free income.
If the investments are made out of mixed
income, and there are sufficient interest free
funds to meet the investment, whether it
will be presumed that the investments were
made fully out of interest free funds.
ORDERS
• The appeal was rejected
stating that the assessee
had not maintained
separate account.
CIT(A)
• It allowed the appeal in
favour of assessee and
held that the disallowance
is not warranted.
ITAT
• The appeal was rejected
on the grounds as held by
CIT.
High Court
CONTENTIONS OF THE
PARTIES
CONTENTIONS OF ASSESSEE
Interest free funds are
sufficient to meet the
investment made in
tax-free securities.
Interest paid by the
assessee on its
borrowings should not
be considered as
expenditure relating to
tax-free income
Assessee has the right
to decide from which
part of the fund, the
investment is made
and revenue is not
permitted to estimate
the proportionate
part.
Therefore, no
disallowance would be
attracted u/s 14A of
the Act.
CONTENTIONS OF REVENUE
Actual expenditure figures
are not available for making
disallowance u/s 14A
No separate accounts are
maintained for making
investment in tax-free
securities and purchase are
made from the mixed
account
Proportionate disallowance
of interest attributable to
funds invested shall be
calculated according to the
average cost of the deposit.
OBSERVATIONS BY
HONOURABLE SC
OBSERVATIONS
As the assessee bank is having surplus reserves, the investments were not made out
of interest bearing funds alone
When interest free funds available with assessee are sufficient to meet the
investment made, the investments are presumed to be made out of such funds.
There is no separate law which obligates the assessee to maintain separate
accounts for different kind of funds.
Assessee bank is having indivisible business, and according to the nature of such
business, the investments made in tax-free securities would be in the nature of
stock-in-trade.
FINAL RULING
.
14A disallowance is not maintainable
merely on the failure of Assessee
Proportionate disallowance is not
warranted where interest free funds
available exceeds the tax free
investments
The appeals are answered against the
revenue and in favour of assessee.
CONCLUSION
KEY TAKEAWAYS
Section 14A, does not enable the Department
to make disallowance on expenditure
incurred for earning tax free income where
separate accounts were not maintained for
the investments and expenditures incurred
for earning the tax-free income as no laws
mandate that.
In taxation regime, there is no room for
presumption and nothing can be taken to be
implied. The tax an individual or a corporate
is required to pay, is a matter of planning for
a tax payer and the Government should
endeavour to keep it convenient and simple
to achieve maximization of compliance
Thank You!
Scan the QR Code to Join our
Research Group on WhatsApp
Scan the QR Code to explore more
Research from our Website
DVS Advisors LLP
India-Singapore-London-Dubai-Malaysia-Africa
www.dvsca.com
Copyrights © 2021 DVS Advisors LLP

Contenu connexe

Tendances

How to make an application for SME IPO listing?
How to make an application for SME IPO listing?How to make an application for SME IPO listing?
How to make an application for SME IPO listing?DVSResearchFoundatio
 
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)DVSResearchFoundatio
 
Stay of Demand under Income Tax Act
Stay of Demand under Income Tax ActStay of Demand under Income Tax Act
Stay of Demand under Income Tax ActDVSResearchFoundatio
 
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIAN
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIANINCORPORATING A COMPANY IN SINGAPORE BY AN INDIAN
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIANDVSResearchFoundatio
 
Appointment of Registered Valuer under the Companies Act, 2013
Appointment of Registered Valuer under the Companies Act, 2013Appointment of Registered Valuer under the Companies Act, 2013
Appointment of Registered Valuer under the Companies Act, 2013DVSResearchFoundatio
 
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...DVSResearchFoundatio
 
Substantial Shareholdings under Singapore Companies Act
Substantial Shareholdings under Singapore Companies ActSubstantial Shareholdings under Singapore Companies Act
Substantial Shareholdings under Singapore Companies ActDVSResearchFoundatio
 
One Person Company - Recent Amendments and Relaxations
One Person Company - Recent Amendments and RelaxationsOne Person Company - Recent Amendments and Relaxations
One Person Company - Recent Amendments and RelaxationsDVSResearchFoundatio
 
What are the steps to be taken after issue by SME?
What are the steps to be taken after issue by SME?What are the steps to be taken after issue by SME?
What are the steps to be taken after issue by SME?DVSResearchFoundatio
 
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part II
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part IISEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part II
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part IIDVSResearchFoundatio
 
ODI by Proprietorship, Trust / Societies and Rollover of Guarantees
ODI by Proprietorship, Trust / Societies and Rollover of GuaranteesODI by Proprietorship, Trust / Societies and Rollover of Guarantees
ODI by Proprietorship, Trust / Societies and Rollover of GuaranteesDVSResearchFoundatio
 
What are the criteria for SME listing?
What are the criteria for SME listing?What are the criteria for SME listing?
What are the criteria for SME listing?DVSResearchFoundatio
 
Certificate of residence in singapore
Certificate of residence in singaporeCertificate of residence in singapore
Certificate of residence in singaporeDVSResearchFoundatio
 
Decoding Section 194Q: Impact on Prospective Purchase and Sale Transactions
Decoding Section 194Q: Impact on Prospective Purchase and Sale TransactionsDecoding Section 194Q: Impact on Prospective Purchase and Sale Transactions
Decoding Section 194Q: Impact on Prospective Purchase and Sale TransactionsDVSResearchFoundatio
 
Income Computation and Disclosure Standards (ICDS) – VI to X
Income Computation and Disclosure Standards (ICDS) – VI to XIncome Computation and Disclosure Standards (ICDS) – VI to X
Income Computation and Disclosure Standards (ICDS) – VI to XDVSResearchFoundatio
 
What are the post listing compliance norms for SME entities?
What are the post listing compliance norms for SME entities?What are the post listing compliance norms for SME entities?
What are the post listing compliance norms for SME entities?DVSResearchFoundatio
 
Funding of Investment in Overseas JV / WOS
Funding of Investment in Overseas JV / WOSFunding of Investment in Overseas JV / WOS
Funding of Investment in Overseas JV / WOSDVSResearchFoundatio
 
CANCELLATION OF REGISTRATION OF TRUST U/S 12AA
CANCELLATION OF REGISTRATION OF TRUST U/S 12AACANCELLATION OF REGISTRATION OF TRUST U/S 12AA
CANCELLATION OF REGISTRATION OF TRUST U/S 12AADVSResearchFoundatio
 

Tendances (20)

How to make an application for SME IPO listing?
How to make an application for SME IPO listing?How to make an application for SME IPO listing?
How to make an application for SME IPO listing?
 
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)
Commissioner of income tax-iv.reliance energy ltd.[2021] 127 taxmann.com 69(sc)
 
Stay of Demand under Income Tax Act
Stay of Demand under Income Tax ActStay of Demand under Income Tax Act
Stay of Demand under Income Tax Act
 
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIAN
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIANINCORPORATING A COMPANY IN SINGAPORE BY AN INDIAN
INCORPORATING A COMPANY IN SINGAPORE BY AN INDIAN
 
Appointment of Registered Valuer under the Companies Act, 2013
Appointment of Registered Valuer under the Companies Act, 2013Appointment of Registered Valuer under the Companies Act, 2013
Appointment of Registered Valuer under the Companies Act, 2013
 
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...
SEBI (LODR) – Obligations on listing of specified securities / NCDs / NCRPS /...
 
Substantial Shareholdings under Singapore Companies Act
Substantial Shareholdings under Singapore Companies ActSubstantial Shareholdings under Singapore Companies Act
Substantial Shareholdings under Singapore Companies Act
 
One Person Company - Recent Amendments and Relaxations
One Person Company - Recent Amendments and RelaxationsOne Person Company - Recent Amendments and Relaxations
One Person Company - Recent Amendments and Relaxations
 
What are the steps to be taken after issue by SME?
What are the steps to be taken after issue by SME?What are the steps to be taken after issue by SME?
What are the steps to be taken after issue by SME?
 
ODI DRAFT REGULATIONS
ODI DRAFT REGULATIONSODI DRAFT REGULATIONS
ODI DRAFT REGULATIONS
 
Investments in IFSC AIFs
Investments in IFSC AIFsInvestments in IFSC AIFs
Investments in IFSC AIFs
 
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part II
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part IISEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part II
SEBI (LODR) Regulations, 2015- Obligations on listing of NCDs / NCRPs - Part II
 
ODI by Proprietorship, Trust / Societies and Rollover of Guarantees
ODI by Proprietorship, Trust / Societies and Rollover of GuaranteesODI by Proprietorship, Trust / Societies and Rollover of Guarantees
ODI by Proprietorship, Trust / Societies and Rollover of Guarantees
 
What are the criteria for SME listing?
What are the criteria for SME listing?What are the criteria for SME listing?
What are the criteria for SME listing?
 
Certificate of residence in singapore
Certificate of residence in singaporeCertificate of residence in singapore
Certificate of residence in singapore
 
Decoding Section 194Q: Impact on Prospective Purchase and Sale Transactions
Decoding Section 194Q: Impact on Prospective Purchase and Sale TransactionsDecoding Section 194Q: Impact on Prospective Purchase and Sale Transactions
Decoding Section 194Q: Impact on Prospective Purchase and Sale Transactions
 
Income Computation and Disclosure Standards (ICDS) – VI to X
Income Computation and Disclosure Standards (ICDS) – VI to XIncome Computation and Disclosure Standards (ICDS) – VI to X
Income Computation and Disclosure Standards (ICDS) – VI to X
 
What are the post listing compliance norms for SME entities?
What are the post listing compliance norms for SME entities?What are the post listing compliance norms for SME entities?
What are the post listing compliance norms for SME entities?
 
Funding of Investment in Overseas JV / WOS
Funding of Investment in Overseas JV / WOSFunding of Investment in Overseas JV / WOS
Funding of Investment in Overseas JV / WOS
 
CANCELLATION OF REGISTRATION OF TRUST U/S 12AA
CANCELLATION OF REGISTRATION OF TRUST U/S 12AACANCELLATION OF REGISTRATION OF TRUST U/S 12AA
CANCELLATION OF REGISTRATION OF TRUST U/S 12AA
 

Similaire à DISALLOWANCE U/S 14A

PE Final presentation(1) (1)
PE Final presentation(1) (1)PE Final presentation(1) (1)
PE Final presentation(1) (1)Abhishek Gupta
 
Section 14 a of i tax act
Section 14 a of i tax actSection 14 a of i tax act
Section 14 a of i tax actCA Bhavya Arora
 
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...DVSResearchFoundatio
 
Accounting and Tax/Zakat in Saudi Arabia by Ernst & Young
Accounting and Tax/Zakat in Saudi Arabia by Ernst & YoungAccounting and Tax/Zakat in Saudi Arabia by Ernst & Young
Accounting and Tax/Zakat in Saudi Arabia by Ernst & YoungArabNet ME
 
Tax management paper BBA University of Peshawar
Tax management paper BBA University of PeshawarTax management paper BBA University of Peshawar
Tax management paper BBA University of PeshawarEmmaSidd
 
Direct Tax Code India _ Jena
Direct Tax Code India _ JenaDirect Tax Code India _ Jena
Direct Tax Code India _ JenaChidananda Jena
 
Advanced FA I&II (1).pdf
Advanced FA I&II (1).pdfAdvanced FA I&II (1).pdf
Advanced FA I&II (1).pdfYasin Abdela
 
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...EY
 
Immigration engagements
Immigration engagementsImmigration engagements
Immigration engagementsAdel Landman
 
Cash Flow Analysis.pptx
Cash Flow Analysis.pptxCash Flow Analysis.pptx
Cash Flow Analysis.pptxAmardeepShetty
 
Webinar - Changing face of SMSF - June 2014
Webinar - Changing face of SMSF - June 2014Webinar - Changing face of SMSF - June 2014
Webinar - Changing face of SMSF - June 2014The SMSF Academy Pty Ltd
 
Effects of Demonetisation
Effects of DemonetisationEffects of Demonetisation
Effects of DemonetisationMitesh Katira
 

Similaire à DISALLOWANCE U/S 14A (20)

SPN Missive January2014
SPN Missive January2014SPN Missive January2014
SPN Missive January2014
 
IND AS IMPACT on MAT
IND AS IMPACT on MATIND AS IMPACT on MAT
IND AS IMPACT on MAT
 
PE Final presentation(1) (1)
PE Final presentation(1) (1)PE Final presentation(1) (1)
PE Final presentation(1) (1)
 
Section 14 a of i tax act
Section 14 a of i tax actSection 14 a of i tax act
Section 14 a of i tax act
 
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...
Analysis of Supreme Court Ruling- National Co-Operative Development Corporati...
 
SPN Missive March 2014
SPN Missive March 2014SPN Missive March 2014
SPN Missive March 2014
 
Snr tax bulletin june 20
Snr tax bulletin june 20Snr tax bulletin june 20
Snr tax bulletin june 20
 
Accounting and Tax/Zakat in Saudi Arabia by Ernst & Young
Accounting and Tax/Zakat in Saudi Arabia by Ernst & YoungAccounting and Tax/Zakat in Saudi Arabia by Ernst & Young
Accounting and Tax/Zakat in Saudi Arabia by Ernst & Young
 
Tax management paper BBA University of Peshawar
Tax management paper BBA University of PeshawarTax management paper BBA University of Peshawar
Tax management paper BBA University of Peshawar
 
Direct Tax Code India _ Jena
Direct Tax Code India _ JenaDirect Tax Code India _ Jena
Direct Tax Code India _ Jena
 
Capital Gains Taxation and Impact on Acquisition Financing in Emerging Market...
Capital Gains Taxation and Impact on Acquisition Financing in Emerging Market...Capital Gains Taxation and Impact on Acquisition Financing in Emerging Market...
Capital Gains Taxation and Impact on Acquisition Financing in Emerging Market...
 
Starting a Business
Starting a BusinessStarting a Business
Starting a Business
 
SPN Missive of October 2013
SPN Missive of October 2013SPN Missive of October 2013
SPN Missive of October 2013
 
Advanced FA I&II (1).pdf
Advanced FA I&II (1).pdfAdvanced FA I&II (1).pdf
Advanced FA I&II (1).pdf
 
Reforms in Starting a Business in Turkey
Reforms in Starting a Business in TurkeyReforms in Starting a Business in Turkey
Reforms in Starting a Business in Turkey
 
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...
EY Budget Connect: Highlights and impact analysis of India's Union Budget 201...
 
Immigration engagements
Immigration engagementsImmigration engagements
Immigration engagements
 
Cash Flow Analysis.pptx
Cash Flow Analysis.pptxCash Flow Analysis.pptx
Cash Flow Analysis.pptx
 
Webinar - Changing face of SMSF - June 2014
Webinar - Changing face of SMSF - June 2014Webinar - Changing face of SMSF - June 2014
Webinar - Changing face of SMSF - June 2014
 
Effects of Demonetisation
Effects of DemonetisationEffects of Demonetisation
Effects of Demonetisation
 

Plus de DVSResearchFoundatio

SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIA
SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIASCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIA
SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIADVSResearchFoundatio
 
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...
Key Takeaways:  - Analysis of section 45(4), section 9B of the Income Tax Act...Key Takeaways:  - Analysis of section 45(4), section 9B of the Income Tax Act...
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...DVSResearchFoundatio
 
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA DVSResearchFoundatio
 
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...DVSResearchFoundatio
 
Advance tax liability when tds not deducted
Advance tax liability when tds not deductedAdvance tax liability when tds not deducted
Advance tax liability when tds not deductedDVSResearchFoundatio
 
What are the steps to be taken prior to SME listing?
What are the steps to be taken prior to SME listing?What are the steps to be taken prior to SME listing?
What are the steps to be taken prior to SME listing?DVSResearchFoundatio
 
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTION
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTIONTAXATION OF MNCs – HEADING TOWARDS A RESOLUTION
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTIONDVSResearchFoundatio
 
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...DVSResearchFoundatio
 
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of Provisions
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of ProvisionsHigher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of Provisions
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of ProvisionsDVSResearchFoundatio
 
Opposition Proceedings under Trademarks Act, 1999
Opposition Proceedings under Trademarks Act, 1999Opposition Proceedings under Trademarks Act, 1999
Opposition Proceedings under Trademarks Act, 1999DVSResearchFoundatio
 
Taxation of MNCs: Heading towards a resolution
Taxation of MNCs: Heading towards a resolutionTaxation of MNCs: Heading towards a resolution
Taxation of MNCs: Heading towards a resolutionDVSResearchFoundatio
 
Registration of Trademark & its related aspects
Registration of Trademark & its related aspectsRegistration of Trademark & its related aspects
Registration of Trademark & its related aspectsDVSResearchFoundatio
 
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...DVSResearchFoundatio
 
Introduction to Trade Marks Act, 1999
Introduction to Trade Marks Act, 1999Introduction to Trade Marks Act, 1999
Introduction to Trade Marks Act, 1999DVSResearchFoundatio
 

Plus de DVSResearchFoundatio (15)

SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIA
SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIASCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIA
SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIA
 
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...
Key Takeaways:  - Analysis of section 45(4), section 9B of the Income Tax Act...Key Takeaways:  - Analysis of section 45(4), section 9B of the Income Tax Act...
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...
 
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA
WITHHOLDING ON GRATUITY PAYMENT SUPREME COURT OF INDIA
 
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...
 
DENIAL OF EXEMPTION U/S 10(23C)
DENIAL OF EXEMPTION U/S 10(23C)DENIAL OF EXEMPTION U/S 10(23C)
DENIAL OF EXEMPTION U/S 10(23C)
 
Advance tax liability when tds not deducted
Advance tax liability when tds not deductedAdvance tax liability when tds not deducted
Advance tax liability when tds not deducted
 
What are the steps to be taken prior to SME listing?
What are the steps to be taken prior to SME listing?What are the steps to be taken prior to SME listing?
What are the steps to be taken prior to SME listing?
 
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTION
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTIONTAXATION OF MNCs – HEADING TOWARDS A RESOLUTION
TAXATION OF MNCs – HEADING TOWARDS A RESOLUTION
 
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...
 
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of Provisions
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of ProvisionsHigher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of Provisions
Higher Rate Of TDS /TCS On Non-Filers: Analysis And Operation Of Provisions
 
Opposition Proceedings under Trademarks Act, 1999
Opposition Proceedings under Trademarks Act, 1999Opposition Proceedings under Trademarks Act, 1999
Opposition Proceedings under Trademarks Act, 1999
 
Taxation of MNCs: Heading towards a resolution
Taxation of MNCs: Heading towards a resolutionTaxation of MNCs: Heading towards a resolution
Taxation of MNCs: Heading towards a resolution
 
Registration of Trademark & its related aspects
Registration of Trademark & its related aspectsRegistration of Trademark & its related aspects
Registration of Trademark & its related aspects
 
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...
Automatic Vacation of Stay Granted by Tribunal: Analysis of SC Ruling DCIT vs...
 
Introduction to Trade Marks Act, 1999
Introduction to Trade Marks Act, 1999Introduction to Trade Marks Act, 1999
Introduction to Trade Marks Act, 1999
 

Dernier

PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTS
PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTSPALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTS
PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTSkajalroy875762
 
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptx
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptxGoal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptx
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptxNetapsFoundationAdmi
 
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...ssuserf63bd7
 
Falcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business PotentialFalcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business PotentialFalcon investment
 
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDE
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDEJIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDE
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDEkajalroy875762
 
Putting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxPutting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxCynthia Clay
 
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR ESCORTS SERVICE PROVIDE
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR  ESCORTS SERVICE PROVIDEJAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR  ESCORTS SERVICE PROVIDE
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR ESCORTS SERVICE PROVIDEkajalroy875762
 
PHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation FinalPHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation FinalPanhandleOilandGas
 
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON ESCORTS SERVICE PROVIDE
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON  ESCORTS SERVICE PROVIDEGURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON  ESCORTS SERVICE PROVIDE
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON ESCORTS SERVICE PROVIDEkajalroy875762
 
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...Falcon Invoice Discounting
 
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDE
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDEJHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDE
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDEkajalroy875762
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertaintycapivisgroup
 
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfThe Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfbelieveminhh
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfHolger Mueller
 
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDE
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDEUJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDE
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDEkajalroy875762
 
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdfciolook1
 
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAIGetting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAITim Wilson
 
Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312LR1709MUSIC
 

Dernier (20)

Contact +971581248768 for 100% original and safe abortion pills available for...
Contact +971581248768 for 100% original and safe abortion pills available for...Contact +971581248768 for 100% original and safe abortion pills available for...
Contact +971581248768 for 100% original and safe abortion pills available for...
 
PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTS
PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTSPALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTS
PALWAL CALL GIRL ❤ 82729*64427❤ CALL GIRLS IN PALWAL ESCORTS
 
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptx
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptxGoal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptx
Goal Presentation_NEW EMPLOYEE_NETAPS FOUNDATION.pptx
 
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...
Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Bur...
 
Falcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business PotentialFalcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business Potential
 
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDE
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDEJIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDE
JIND CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JIND ESCORTS SERVICE PROVIDE
 
Putting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxPutting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptx
 
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR ESCORTS SERVICE PROVIDE
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR  ESCORTS SERVICE PROVIDEJAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR  ESCORTS SERVICE PROVIDE
JAJPUR CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JAJPUR ESCORTS SERVICE PROVIDE
 
PHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation FinalPHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation Final
 
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON ESCORTS SERVICE PROVIDE
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON  ESCORTS SERVICE PROVIDEGURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON  ESCORTS SERVICE PROVIDE
GURGAON CALL GIRL ❤ 8272964427❤ CALL GIRLS IN GURGAON ESCORTS SERVICE PROVIDE
 
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
 
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDE
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDEJHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDE
JHANSI CALL GIRL ❤ 8272964427❤ CALL GIRLS IN JHANSI ESCORTS SERVICE PROVIDE
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertainty
 
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
 
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfThe Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
 
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDE
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDEUJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDE
UJJAIN CALL GIRL ❤ 8272964427❤ CALL GIRLS IN UJJAIN ESCORTS SERVICE PROVIDE
 
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf
10 Influential Leaders Defining the Future of Digital Banking in 2024.pdf
 
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAIGetting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
Getting Real with AI - Columbus DAW - May 2024 - Nick Woo from AlignAI
 
Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312
 

DISALLOWANCE U/S 14A

  • 1. DISALLOWANCE U/S 14A SOUTH INDIAN BANK LTD. V. COMMISSIONER OF INCOME-TAX [2021] 130 TAXMANN.COM 178 (SC) .
  • 2. LEGENDS USED AO Assessing Officer CIT Commissioner of Income Tax CIT(A) Commissioner of Income Tax (Appeals) HC High Court ITAT Income Tax Appellate Tribunal SC Supreme Court SLR Statutory liquidity Ratio
  • 3. PRESENTATION SCHEMA Facts of the Case Issues & Orders of the Case Contention of the Parties Observations by Honourable SC Conclusion
  • 5. GENERAL FACTS Assessee • The assessees are scheduled banks and in course of their banking business • Engage in the business of investments in bonds, securities and shares which earns interest and dividend on the same. Subject mater • Scheduled banks earned income from investments made in tax-free securities. • Interest free funds available with assessees were larger than investments made in said securities. Facts • The case pertains to AY 2011-12 • Separate accounts were not maintained by assessee for investments and other expenditures incurred for earning tax-free income. • Therefore, proportionate disallowance on expenditure could not be made u/s 14A
  • 6. ISSUES AND ORDERS OF THE CASE
  • 7. ISSUES Whether Section 14A enables the Department to make disallowance on expenditure incurred for earning tax free income in cases where assessees, do not maintain separate accounts for the investments and other expenditures incurred for earning the tax-free income. If the investments are made out of mixed income, and there are sufficient interest free funds to meet the investment, whether it will be presumed that the investments were made fully out of interest free funds.
  • 8. ORDERS • The appeal was rejected stating that the assessee had not maintained separate account. CIT(A) • It allowed the appeal in favour of assessee and held that the disallowance is not warranted. ITAT • The appeal was rejected on the grounds as held by CIT. High Court
  • 10. CONTENTIONS OF ASSESSEE Interest free funds are sufficient to meet the investment made in tax-free securities. Interest paid by the assessee on its borrowings should not be considered as expenditure relating to tax-free income Assessee has the right to decide from which part of the fund, the investment is made and revenue is not permitted to estimate the proportionate part. Therefore, no disallowance would be attracted u/s 14A of the Act.
  • 11. CONTENTIONS OF REVENUE Actual expenditure figures are not available for making disallowance u/s 14A No separate accounts are maintained for making investment in tax-free securities and purchase are made from the mixed account Proportionate disallowance of interest attributable to funds invested shall be calculated according to the average cost of the deposit.
  • 13. OBSERVATIONS As the assessee bank is having surplus reserves, the investments were not made out of interest bearing funds alone When interest free funds available with assessee are sufficient to meet the investment made, the investments are presumed to be made out of such funds. There is no separate law which obligates the assessee to maintain separate accounts for different kind of funds. Assessee bank is having indivisible business, and according to the nature of such business, the investments made in tax-free securities would be in the nature of stock-in-trade.
  • 14. FINAL RULING . 14A disallowance is not maintainable merely on the failure of Assessee Proportionate disallowance is not warranted where interest free funds available exceeds the tax free investments The appeals are answered against the revenue and in favour of assessee.
  • 16. KEY TAKEAWAYS Section 14A, does not enable the Department to make disallowance on expenditure incurred for earning tax free income where separate accounts were not maintained for the investments and expenditures incurred for earning the tax-free income as no laws mandate that. In taxation regime, there is no room for presumption and nothing can be taken to be implied. The tax an individual or a corporate is required to pay, is a matter of planning for a tax payer and the Government should endeavour to keep it convenient and simple to achieve maximization of compliance
  • 17. Thank You! Scan the QR Code to Join our Research Group on WhatsApp Scan the QR Code to explore more Research from our Website DVS Advisors LLP India-Singapore-London-Dubai-Malaysia-Africa www.dvsca.com Copyrights © 2021 DVS Advisors LLP