S. 14A In case net interest is income, no part of interest paid can be disallowed for earning tax free dividend

The taxpayer adjusted the interest expenditure against the interest income earned. After such adjustment no interest expenditure remained to be disallowed. The taxpayer offered expenditure other than interest of Rs.  111,521 for disallowance under Section 14A of the Act on the estimated basis. The Kolkata Tribunal held that there was no interest expenditure remaining after adjusting the interest credited to the Profit and Loss Account. Therefore, no part of interest paid can be disallowed for earning tax free dividend. Further, expenditure other than interest had been offered for disallowance...