M/s Salarpuria Homes Pvt. Ltd. vs. ACIT, Circle -1(2), Kolkata

Parties Involved

Facts Summary

The appellant, M/s Salarpuria Homes Pvt. Ltd., filed its return of income on 14.12.2016 showing an income of Rs. 88,55,330/-. The Assessing Officer found that there were investments in equity shares which had the potential to yield exempt income in the shape of dividends. However, no exempt income was received by the assessee as there was no investment made in equity shares as alleged by the Assessing Officer. The Assessing Officer applied the provisions of Section 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962 to make an addition of Rs. 10,83,591/-. The appellant approached the Commissioner of Income Tax (Appeals)-NFAC who confirmed the action of the Assessing Officer. The appellant then filed an appeal against this order.…

Legal Issues

• 1. Whether the addition of Rs. 10,83,591/- made by the Assessing Officer u/s 14A read with Rule 8D is justified.
• 2. Whether the disallowance u/s 14A read with Rule 8D(2) is justified without appreciating the facts that there was no exempt income earned by the appellant.
• 3. Whether the disallowance u/s 14A read with Rule 8D(2) is justified in the absence of investment in shares & securities.
• 4. Whether the MAT credit of Rs. 1,38,064/- should be allowed.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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