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| The Tax Publishers2019 TaxPub(DT) 0124 (Ahd-Trib) INCOME TAX ACT, 1961
Section 14A
Where assessee had not claimed any exempt income during relevant assessment year, disallowance under section 14A was not warranted because in absence of any tax-free income the corresponding expenditure could not be taken into consideration for disallowance.
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Disallowance under section 14A - Expenditure against exempt income - No exempt dividend income claimed by assessee -
Assessee earned exempt dividend income during the relevant assessment year. AO made addition under section 14A, which was deleted by Tribunal because during the said assessment year, assessee had not claimed any exempt income. Revenue without challenging the above fact contended Tribunal's order on another ground related to addition under section 14A with respect to investment in subsidiary company made by the assessee. Held: The fact that assessee had not claimed any exempt income during the relevant assessment year was accepted by revenue. If for the relevant assessment year, the assessee did not earn any tax-free income, the corresponding expenditure incurred could not be taken into consideration for disallowance. Thus, another ground lacking substantial question of law became academic.
Followed:CIT v. Corrtech Energy (P) Ltd. (2015) 372 ITR 97 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC)
REFERRED : CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC)
FAVOUR : In assessee's favor
A.Y. :
IN THE ITAT, AHMEDABAD BENCH
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