Disallowance u/s 14A is to be made even when exempt income is not earned or received during the year
Case Law Details
Case Name : Cheminvest Ltd. Vs ITO (ITAT Delhi)
Related Assessment Year : 2004- 05
Courts :
All ITAT ITAT Delhi
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Special Bench of the Income Tax Appellate Tribunal, New Delhi holds that expenditure relating to exempt income to be disallowed even if assessee has not earned any tax-free income.
Background
Section 14A of the Income-tax Act, 1961 (“Act?), inserted by the Finance Act, 2001 with retrospective effect from 1 April 1962, provides that no deduction shall be allowed in respect of expenditure incurred in relation to exempt income.
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