Disallowance of expenditure under Section 14A: Applicability to Insurance business
Case Outcome: Assessee
- The ground of appeal raised by the revenue was that whether on facts and circumstance of the case and in law, the Commissioner of Income Tax (Appeals) was correct in deleting the disallowance under section 14A of the Income Tax Act, 1961 which was made by the Assessing Officer on the basis the fetter prescribed in Section 44 of the Income Tax Act, 1961.
- Reliance was placed on the Tribunal Mumbai Bench in the case of ICICI Prudential Insurance Co. Ltd. case, wherein a view was taken that since Section 44 created a specific exception to the applicability of section 28 to section 43B, therefore purpose object & purview of Section 14A had no applicability to profits and gains of an insurance business.
- Therefore, following the same in the present facts of the case the provisions of Section 14A would not apply to the Assessee as it was an insurance company.
- Issue Outcome- In favour of Assessee
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