No addition can be made u/s 14A in excess of expenses debited in P&L a/c. Also, no addition can be made u/s 14A in respect of purchases and depreciation debited to P&L a/c:

AO made huge disallowance u/s 14A on the basis of Rule 8D of the Income-tax Rules, 1962. Hon’ble ITAT observed that apart from purchase and depreciation, only three expenses were debited to the P&L account viz. Administrative expenses, interest expenses and other expenses. Out of the same, assessee had disallowed entire interest expenses while computing her income. CIT(A) had confirmed the addition made by AO to the extent of aggregate of administrative and other expenses and deleted the balance amount of addition. It was held that no addition can be made u/s 14A in respect purchases and depreciation. Since rest of the three expenses were either disallowed by assessee or confirmed by CIT(A), no further addition can be sustained u/s 14A in excess of the amount debited to P&L account.

[ACIT vs. Smt. Neeta M. Patel – ITA No.1964/Ahd/2012]