INCOME TAX ACT, 1961

Section 14A

Disallowance under section 14A - Expenditure against exempt income - AO made disallowance in excess of tax fee income earned by assessee -

Assessee earned tax-free dividend income amounting to Rs. 4,000. AO invoked section 14A read with rule 8D and made disallowance of Rs. 14,000. Held: Disallowance under section 14A read with rule 8D could not exceed tax-free income earned by assessee and, therefore, assessee was directed to restrict disallowance to extent of dividend income of Rs. 4,000 earned by assessee.

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 68

SUBSCRIBE FOR FULL CONTENT