Section 14A applies only where there is actual receipt of income

MVL Industries Ltd. vs. D.C.I.T. (ITAT Delhi)– Provisions of section 14A are to prevent claims of deduction of expenditure in relation to income which does not form part of the total income of the assessee; that these provisions are enacted to ensure that only expenses incurred in respect of earning taxable income are allowable; that the principle of apportionment of expenses is widened by section 14A to include even the apportionment of expenditure between taxable and non-taxable income of an indivisible business; that the principle of taxation on net income applies even for the purpose...