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The Tax Publishers Igarashi Motors India Ltd. v. Dy. CIT [ITA No. 878/Mds/2014, dt. 24-3-2016] : 2016 TaxPub(DT) 2142 (Chen-Trib) Disallowance under section 14A with no tax exempt income and investments made due to business expediency *Facts:* Assessee had to invest in two of its joint venture listed entities of its group out of business expediency. No income arose from such investments. The assessing officer made disallowance under section 14A citing that expenditure to earn tax-free income was to be disallowed. DRP upheld the disallowance. On further appeal: Held in favour of the assessee that no disallowance under section 14A was called for in the absence of income and in the case of investments which had to be done on consideration of business expediency.

The Tax Publishers

Igarashi Motors India Ltd. v. Dy. CIT [ITA No. 878/Mds/2014, dt. 24-3-2016] : 2016 TaxPub(DT) 2142 (Chen-Trib)

Disallowance under section 14A with no tax exempt income and investments made due to business expediency

Facts:

Assessee had to invest in two of its joint venture listed entities of its group out of business expediency. No income arose from such investments. The assessing officer made disallowance under section 14A citing that expenditure to earn tax-free income was to be disallowed. DRP upheld the disallowance. On further appeal:

Held in favour of the assessee that no disallowance under section 14A was called for in the absence of income and in the case of investments which had to be done on consideration of business expediency.