Case Law Details
Mylan Laboratories Limited Vs DCIT (ITAT Hyderabad)
When assessee had not earned any exempt income during the relevant assessment year, disallowance under section 14A could not be made.
Facts –
AO noticed that assessee had shown an amount of INR 176.65 Crore under the head ‘investments’ but it had not shown any income from the said investments in its accounts and no income was offered in the computation of income. Thus, AO invoked the provisions of section 14A and disallowed the amount of proportionate interest.
Assessee submitted that it did not incur any expenditure and nor there was any income which was claimed as exemption. It was further contended that there was no nexus between the borrowed funds and investments made.
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