Case Law Details
DCIT Vs JSW Limited (ITAT Mumbai)
The issue under consideration is whether A.O. is correct in restricting the disallowance under section 14A of the Income Tax Act, 1961, without appreciating the fact that the appellant company has not earned any tax-exempt income during the relevant assessment year?
As per Section 14A of the Act, the purposes of computing the total income under Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction.
In the given case, there was no tax-exempt income in the relevant previous year, hence ITAT hold that no disallowance under section 14A could have been made, on the facts of this case and in the year before us. ITAT, therefore, uphold the plea of the assessee and delete the disallowance of Rs 80,51,200 sustained by the CIT(A). The grievance of the assessee is thus upheld and grievances of the Assessing Officer are dismissed as infructuous.
FULL TEXT OF THE ITAT JUDGEMENT
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