Section 14A Cannot Apply When No Exempt Income Exists: ITAT Delhi

Ahluwalia Contracts India Ltd. Vs ACIT (ITAT Delhi) In this case, the appeal arose from an assessment order passed under Section 143(3) of the Income Tax Act, 1961 for Assessment Year 2023–24, wherein the Assessing Officer (AO) made a disallowance of ₹6,28,000 under Section 14A read with Rule 8D. The disallowance was made on the basis that the assessee held investments capable of generating exempt income, despite no such disallowance being made by the assessee in its return. During assessment proceedings, the AO issued a show-cause notice seeking justification for non-applicability of Sect...