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| The Tax Publishers2021 TaxPub(DT) 0933 (Ahd-Trib) INCOME TAX ACT, 1961
Section 14A
In view of decision rendered in the case of CIT v. Corrtech Energy Ltd. [(2015) 372 ITR 97 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC)] maximum disallowance under section 14A could be made equivalent to exempt income earned by the assessee in the absence of any expenses being incurred to earn such income.
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Disallowance under section 14A - Expenditure against exempt income - AO worked out disallowance including interest expenses -
Assessee a non-banking finance company engaged in financing loans and advance and other ancillary activities earned dividend income. AO worked out the disallowance under section 14A which included interest expenses required to be allocated under section 14A read with rule 8D. Held: Issue in dispute was squarely covered by the decision of the case of CIT v. Corrtech Energy Ltd. [(2015) 372 ITR 97 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC)], wherein it was held that maximum disallowance under section 14A could be made equivalent to exempt income earned by the assessee in the absence of any expenses being incurred to earn such income. Therefore, in the present case, disallowance cannot exceed the dividend income earned by the assessee.
Followed:CIT v. Corrtech Energy Ltd. [(2015) 372 ITR 97 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC)]
REFERRED :
FAVOUR : In favour of assessee
A.Y. : 2015-16
IN THE ITAT, AHMEDABAD BENCH
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