Excessive disallowance u/s 14A was restricted as AO failed to record dissatisfaction

DCIT Vs Welspun Mercantile Limited (ITAT Mumbai)

Conclusion: Excessive disallowance made under Section 14A was restricted as AO had failed to record any dissatisfaction with assessee’s claim regarding the expenditure incurred to earn tax-exempt income, which was a mandatory requirement before invoking Rule 8D for disallowance under Section 14A.

Held: Assessee-company, had filed a nil return, showing income from business and short-term capital gains, both of which were adjusted against brought-forward losses for the assessment year 2014-15.

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