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| The Tax Publishers2020 TaxPub(DT) 1189 (Mad-HC) : (2020) 421 ITR 0162 INCOME TAX ACT, 1961
Section 14A
Since assessee did not earn any exempt income or dividend income during the year, no disallowance could be made under section 14A and hence, the disallowance made under section 14A was liable to be deleted.
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Disallowance under section 14A - Expenditure against exempt income - No exempt income earned by assessee -
Assessee-company made investment in equity shares. It also paid debenture interest and finance charges on the debentures issued by it. AO disallowed the entire debenture interest and finance charges under section 14A on the premise that the equity shares were purchased by the assessee out of borrowed money. Held: Where assessee did not earn any exempt income or dividend income during the year, there was no question of disallowing any part of debenture interest or finance charges, since the provisions under section 14A were not attracted at all and hence, the disallowance made under section 14A was deleted.
Distinguished:Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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