Section 14A cannot be applied to losses due to diminution in value of investments due to merger/amalgamation

ACIT Vs Af-taab Investment Company Limited (ITAT Mumbai) The revenue is aggrieved by the decision of learned CIT(A) directing exclusion of diminution in the value of investments for the purposes of computation of disallowance u/s 14A.We have observed that the AO has also included diminution in the value of investments for the purpose of computing disallowance u/s.14A, which loss has arisen because of the restructuring / amalgamation owing to loss written off of in the investment in subsidiary namely Vantech Investments Limited, which stood merged with the assessee. In our considered view , sai...