Section 14A Disallowance Cannot Exceed Exempt Income: Bombay HC

Advertisement Nirved Traders Pvt. Ltd. Vs DCIT (Bombay High Court) The assessee, a private limited company and a non-banking financial company, appealed against the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2008-09. The appeal raised the substantial question of whether the Tribunal was correct in confirming a disallowance under Section 14A of the Income Tax Act, 1961 in excess of the exempt income earned by the assessee. During the relevant assessment year, the assessee claimed interest expenditure of ₹6,87,57,951 and earned exempt dividend income of ₹1,13,72...