INCOME TAX ACT, 1961

Section 14A

Disallowance under section 14A - Expenditure against exempt income - Assessee pleading no exempt income to have been received during the year -

AO noticed investments in shares in assessee's balance sheet and taking note of tax free dividend income earned by assessee during preceding year made disallowance under section 14A for the year under consideration. Assessee's case was that although in the preceding year, there was dividend income but in the concerned year, there was no exempt income earned by assessee. Held: As computation of income was not filed by assessee, matter was restored to CIT(A) for fresh decision after finding out as to whether assessee had earned any exempt income in the concerned year and disallowance under section 14A was to be restricted to the extent of such exempt income earned by the assessee in the year under consideration.

Supported by:Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (Del.) : 2015 TaxPub(DT) 3520 (Del-HC).

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 37(1)

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