Disallowance u/s.14A and disallowance of interest u/s. 36 (1) (iii) of the Income Tax Act

Last updated: 18 January 2021

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This Income Tax Appellate Tribunal case concerns OPG Securities Pvt. Ltd. and their appeal against disallowances made by the AO. The assessee is challenging two main points: the disallowance of expenses under Section 14A for earning dividend income, and the disallowance of interest expenses under Section 36(1)(iii). The AO noted that the company, involved in share trading, earned dividend income but did not disallow any expenses related to it.

Court :
ITAT New Delhi

Brief :
This appeal by the assessee is preferred against the order ofthe CIT(A)-38, New Delhi dated 23.10.2017 pertaining to A.Y. 2013-14.

Citation :
ITA No.599/DEL/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘E’, NEW DELHI

BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER
AND
SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER

ITA No.599/DEL/2018
Assessment Year: 2013-14

OPG Securities Pvt. Ltd.
OPG House, 4/10, Asaf Ali
Road, New Delhi -110002
(APPELLANT)

DCIT
Circle – 19 (1)
New Delhi
(RESPONDENT)

Appellant by Sh. Rohit Jain, Advocate
Respondent by Ms. Rakhi Vimal, Sr. DR

Date of hearing: 06/01/2021
Date of Pronouncement: 08/01/2021

ORDER

PER N. K. BILLAIYA, AM:

This appeal by the assessee is preferred against the order ofthe CIT(A)-38, New Delhi dated 23.10.2017 pertaining to A.Y. 2013-14.

2. The assessee is aggrieved by two additions first disallowanceu/s.14A and second disallowance of interest u/s. 36 (1) (iii) of theAct.

3. Briefly stated the appellant is a member of Bombay Stockexchange and national stock exchange and is indulge in thebusiness of share trading. During the course of the scrutiny assessment proceedings the AO noticed that the assessee has earned dividend income of Rs.364490/-. The AO noticed that theassessee has not disallowed any expenses for earning the exempt income u/s. 14A of the Act.

To know more in details find the attachment file

FAQ :

The appeal by OPG Securities Pvt. Ltd. concerns two primary issues: the disallowance of expenses under Section 14A of the Income Tax Act related to earning dividend income, and the disallowance of interest expenses under Section 36(1)(iii) of the Act.

Section 14A states that expenses incurred by an assessee in relation to income which does not form part of the total income (i.e., exempt income) cannot be allowed as a deduction.

Section 36(1)(iii) deals with the deductibility of interest on capital borrowed for the purposes of business or profession.

The AO noticed that the assessee earned dividend income but did not disallow any expenses for earning this exempt income, as required by Section 14A.

OPG Securities Pvt. Ltd. is a member of the Bombay Stock Exchange and National Stock Exchange and is involved in the business of share trading.