No Section 14A Disallowance Without Exempt Income: Bombay HC

PCIT Vs JSW Energy Ltd. (Bombay High Court) Bombay High Court has dismissed an appeal filed by the Principal Commissioner of Income Tax (PCIT) against JSW Energy Ltd., upholding the Income Tax Appellate Tribunal’s (ITAT) order. The High Court’s decision reaffirms the principle that disallowance under Section 14A of the Income Tax Act, 1961, for expenditure incurred in earning exempt income, is not applicable if no exempt income is actually received or receivable during the relevant previous year. This principle also extends to the computation of book profits under Section 115JB of ...