INCOME TAX ACT, 1961

Section 14A

Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - AO made disallowance in excess of tax free income earned by assessee

Assessee earned tax free dividend income on investments in shares and claimed suo moto disallowance under section 14A. AO invoked rule 8D and worked out disallowance in excess of tax free income earned by assessee. Held: Disallowance under section 14A was liable to be restricted to the extent of exempt dividend income earned by the assessee during the year.

Relied:Nirved Traders (P) Ltd. v. Dy. CIT, Circle-1(2), ITA No. 149/2017, dated 23-4-2019 : 2020 TaxPub(DT) 1188 (Bom-HC).

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 22

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