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| The Tax Publishers2020 TaxPub(DT) 4654 (Mad-HC) : (2021) 430 ITR 0052 INCOME TAX ACT, 1961
Section 14A Rule 8D
Where there was no exempt income received by assessee even if the investments have been made in the subsidiary company of the assessee, no disallowance could be made under section 14A read with rule 8D.
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Disallowance under section 14A - Expenditure against exempt income - No exempt income earned by assessee -
AO on the ground that investments were made by assessee in the subsidiary company even if there was no exempt income made disallowance under section 14A read with rule 8D. Held: It was not in dispute that the investments were made in subsidiary companies. When the investments were made in wholly-owned subsidiary companies, it cannot be construed that investment was made for earning exempt income. Investment made in wholly-owned company was only for the purpose of business. Moreover, in Redington (India) Ltd. v. Addl. CIT 2017 TaxPub(DT) 0345 (Mad-HC) it was held that when there was no exempt income, there cannot be any disallowance under section 14A. Following the same, disallowance made could not be held as justified.
Followed:Redington (India) Ltd. v. Addl. CIT 2017 TaxPub(DT) 0345 (Mad-HC).
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 43A
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