Section 14A Disallowance Not Allowed as No Exempt Income Was Earned

Advertisement Cheminvest Limited Vs CIT (Delhi High Court) The Delhi High Court considered an appeal filed by the assessee under Section 260A of the Income-tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2004-05. The substantial question of law was whether a disallowance under Section 14A could be made in a year in which the assessee had not earned or received any exempt income. The assessee, engaged in the business of making investments in shares and granting and accepting loans, had borrowed funds on which interest expenditure of ₹1,21,03...