| |
| The Tax Publishers2021 TaxPub(DT) 1849 (Chen-Trib) INCOME TAX ACT, 1961
Section 14A Rule 8D
As there was no exempt income earned by assessee during the year under consideration; no disallowance could be made towards expenses relatable to the said exempt income under section 14A read with rule 8D and hence, the disallowance made by AO under section 14A read with rule 8D was liable to be deleted.
|
Disallowance under section 14A - Expenditure against exempt income - No exempt income earned by assessee during the year -
Assessee-company was engaged in business of manufacturing textiles and export of ready-made garments. AO made disallowance towards interest expenses under section 14A read with rule 8D(2)(ii) and other expenses under section 14A read with 8D(2)(iii). Assessee contended that it had not received any exempt income for the year under consideration and hence, question of disallowance of expenditure incurred towards said exempt income would not arise. However, AO took the view that whether or not exempt income was received during the year, expenses relatable to such exempt income was required to be disallowed.Held: Since there was no exempt income earned by assessee during the year under consideration; no disallowance could be made towards expenses relatable to the said exempt income under section 14A read with rule 8D and hence, the disallowance made by AO under section 14A read with rule 8D was accordingly, deleted.
Followed:Redington (India) Ltd. v. Addl. CIT TCA No. No. 520 of 2013, dated 23-12-2016 : 2017 TaxPub(DT) 345 (Mad-HC).
REFERRED : CIT v. Chettinad Logistics (P) Ltd. 2017 80 Taxmann.com 221 (Mad-HC) : 2017 TaxPub(DT) 1144 (Mad-HC).
FAVOUR : In assessee's favour.
A.Y. : 2014-15.
INCOME TAX ACT, 1961
Section 36(1)(va) Section 2(24)(x)
 SUBSCRIBE FOR FULL CONTENT
|