Nahar Industrial Enterprises Ltd. v. The DCIT

Parties Involved

Facts Summary

The assessee, Nahar Industrial Enterprises Ltd., filed an appeal against the order of the Ld. CIT(A)/ NFAC, Delhi dated 02/08/2024 pertaining to Assessment Year 2022-23. The assessee challenged the addition of Rs. 80,33,860/- made by the AO under Section 14A r.w.r 8D on the dividend income, which was not exempt during the year but taxable. The assessee had declared the dividend income of Rs. 20.50 lacs as part of the taxable income and paid taxes thereon. The assessee argued that the invocation of Section 14A r.w. Rule 8D was erroneous as the dividend income was not claimed as exempt. The tribunal found that the dividend income had been offered to tax and formed part of the total income, and thus, the disallowance under Section 14A r/w Rule 8D was not applicable.…

Legal Issues

• 1. Whether the disallowance of Rs. 80,33,860/- made by the AO under Section 14A r.w.r 8D on the dividend income was justified.

Judgment Outcome

Decided in favour of Assessee.

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