| The Tax Publishers2020 TaxPub(DT) 4615 (Bom-HC) : (2020) 429 ITR 0319 : (2021) 277 TAXMAN 0543 INCOME TAX ACT, 1961
Section 14A
Where there was no dispute that the dividend, i.e., the exempt income earned by the assessee during the relevant assessment year, was only Rs. 45,371, accordingly, disallowance in this case could not have exceeded Rs. 45,371 because the assessee voluntarily offered a disallowance to the extent of Rs. 65,000, thus, substantial question of law was, therefore, answered against the revenue.
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Disallowance under section 14A - Expenditure incurred against exempted income - Disallowance cannot be more than exempted income -
Issue for consideration was as to whether Appellate Tribunal erred in law in upholding the disallowance to the extent of Rs. 65,000 only and deleting the balance addition of Rs. 24,06,566 under section 14A. Held: Disallowance under section 14A cannot be more than the exempt income earned by assessee during assessment year in question. In this case, there was no dispute that the dividend, i.e., the exempt income earned by the assessee during the relevant assessment year was only Rs. 45,371. Accordingly, disallowance in this case could not have exceeded Rs. 45,371. It is only because the assessee voluntarily offered a disallowance to the extent of Rs. 65,000, that CIT(A) made a disallowance to the extent of Rs. 65,000. Substantial question of law was, therefore, answered against the revenue.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 68
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