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Revenue to establish proximate relationship between expenditure & exempt income for section 14A disallowance
Case Law Details
- Case Name
- CIT Vs Sociedade De Fomento Industrial Pvt. Ltd (Bombay High Court at Goa)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2009-10
- Courts
- All High Courts, Bombay High Court
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CIT Vs Sociedade De Fomento Industrial Pvt. Ltd (Bombay High Court)
Here, on facts, the Tribunal noted that the AO only discussed the provisions of section 14A(l) but has not justified how the expenditure the Assessee incurred during the relevant year related to the income not forming part of its total income. The AO, according to the Tribunal, straightaway applied Rule 8D. Indeed, there must be a proximate relationship between the expenditure and the tax-exempt income. Only then would a disallowance have to be effected. This Court, we may note, on more than one occasion, has held that the onu...
