#Section 14A

The ITAT Kolkata held that depreciation can be claimed on goodwill/brands acquired in a demerger under Section 32 of the Income Tax Act, and that a disallowance under Section 14A requires the Assessing Officer to record dissatisfaction with the taxpayer's apportionment. The decision impacts companies undertaking demergers seeking to amortise intangible assets and clarifies the procedural requirement for Section 14A disallowances.

Andhra Pradesh High Court grants default bail to an accused under the SC & ST (Prevention of Atrocities) Act after 63 days in custody, ruling that failure to file a charge sheet within 60 days entitles the accused to bail under Section 14A. The judgment reaffirms strict compliance with statutory timelines for charge sheets in atrocity cases.

ITAT Delhi rules that disallowance under Section 14A read with Rule 8D cannot be factored into book profit computation for MAT under Section 115JB. The ruling clarifies that such disallowances remain excluded from MAT calculations, impacting corporate tax assessments.

ITAT Mumbai rules that interest earned by Indian branches of foreign banks from their head office or overseas branches is not taxable under Section 9(1)(v)(c) of the Income Tax Act, as it constitutes payment to self rather than income. The decision reinforces the mutuality principle, shielding such transactions from domestic tax liability for foreign banks operating in India.

Payments for onsite software services to foreign entities do not attract TDS under Section 195 unless the assessee gains access to proprietary technical knowledge or know-how. ITAT Bangalore clarifies that mere presence of foreign personnel in India for implementation or support does not satisfy the 'make available' condition, significantly narrowing the scope of deemed fees for technical services and offering relief to IT firms relying on global onsite teams.

ITAT Delhi ruled that taxpayers cannot claim interest deductions under Section 36(1)(iii) if they fail to prove borrowed funds were exclusively used for business purposes, especially when those funds were also deployed in exempt income-generating assets. The ruling reinforces that Section 14A disallowance cannot be assumed - it must be substantiated with clear allocation evidence, impacting all businesses with mixed-use borrowings and exempt income streams.

The ITAT Mumbai has ruled that tax authorities cannot invoke Rule 8D to disallow expenses under Section 14A when the taxpayer has not claimed any deduction attributable to exempt income, even if investments exist. This shields taxpayers using presumptive taxation or capitalizing costs from artificial disallowances, reinforcing that disallowance requires actual claimed expenditure - not mere asset holding.

ITAT Mumbai rules that Section 14A disallowance cannot apply without exempt income, and actual rent under genuine agreements prevails over notional Annual Letting Value (ALV). The decision reinforces that tax disallowances must be grounded in real income, not hypothetical valuations, impacting tax assessments for commercial property owners.

ITAT Kolkata has ruled that under Section 14A read with Rule 8D, the disallowance of expenditure attributable to exempt income cannot exceed the actual amount of exempt income earned, aligning with the Supreme Court’s Maxopp Investment precedent. This sets a critical cap on revenue department adjustments, protecting taxpayers whose exempt income is lower than claimed expenditures, especially in cases involving mixed income streams.

ITAT Ahmedabad sets a precedent requiring assessing officers to record objective satisfaction regarding expenditure incurred for exempt income before invoking Rule 8D disallowance under Section 14A. The ruling protects assessees from mechanical additions, reinforcing natural justice in tax assessments.

ITAT Agra rules that the Assessing Officer must record objective dissatisfaction under Section 14A(2) of the Income Tax Act before invoking Rule 8D for disallowing expenses related to exempt income like dividends. The Tribunal emphasized that mechanical application of Rule 8D without identifying expenditure relatable to exempt income is invalid, reinforcing procedural safeguards for taxpayers.

ITAT Delhi rules that if an assessee’s own funds surpass the value of dividend-yielding investments, disallowance under Section 14A read with Rule 8D is unwarranted-even without separate books of accounts. The ruling clarifies that the Assessing Officer must demonstrate nexus between borrowed funds and investments before invoking Rule 8D, offering relief to entities with surplus liquidity.

ITAT Delhi rules that disallowance under Section 14A of the Income Tax Act cannot exceed the exempt income earned, quashing a Rs. 3.44 crore addition in Panacea Biotec Ltd. The judgment reinforces that Rule 8D calculations must align with actual exempt income, impacting tax assessments for companies with mixed investment portfolios.

ITAT Delhi rules that disallowance under Section 14A read with Rule 8D cannot be invoked if no exempt income is earned in the assessment year. The decision reinforces the 2022 amendment's prospective application, providing relief to taxpayers facing arbitrary disallowances on investments not yielding tax-exempt returns.

The ITAT Delhi has ruled that Section 14A cannot be invoked to disallow expenses unless there is actual exempt income earned. Notional gains from foreign currency translation or interest on capital loans, even if hypothetically linked to exempt activities, do not trigger disallowance. This shields multinational entities from speculative tax adjustments based on accounting entries rather than real income.