The Tax Publishers2020 TaxPub(DT) 2399 (Chen-Trib)

INCOME TAX ACT, 1961

Section 14A Rule 8D

Where assessee did not earn any exempt income during the year; the disallowance made under section 14A read with rule 8D was not warranted and hence, such disallowance was liable to be deleted.

Disallowance under section 14A - Expenditure against exempt income - No exempt income earned by assessee -

AO made disallowance under section 14A read with rule 8D. Assessee-company submitted that no exempt income was earned by it during the year, thus, the disallowance under section 14A read with rule 8D was not justified. Held: Since assessee did not earn any exempt income during the year; the disallowance made under section 14A read with rule 8D was not warranted and hence, such disallowance was deleted.

REFERRED : Madras Industrial Investment Corporation Limited v. CIT (1997) 225 ITR 802 (SC) : 1997 TaxPub(DT) 1209 (SC), CIT v. Chettinad Logistics (P) Ltd. 2017 TaxPub(DT) 1144 (Mad-HC), Redington (India) Ltd. v. Addl. CIT (2016) 97 CCH 219 (Mad) : 2017 TaxPub(DT) 0345 (Mad-HC) and CIT (Central) 1 v. Chettinad Logistics (P) Ltd. 2018 TaxPub(DT) 4126 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2017-18



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