HC Rejects Section 14A Disallowance Due to Absence of Exempt Income

PCIT Vs Morgan Stanley India Securities P Ltd (Bombay High Court) The revenue filed an appeal under Section 260A of the Income Tax Act challenging the order dated 5 January 2017 of the Income Tax Appellate Tribunal, Mumbai, in relation to the assessment year 2008–09. The revenue raised three questions of law regarding the Tribunal’s decision to delete a disallowance made under Section 14A. The first issue concerned whether the Tribunal was justified in deleting the disallowance on the ground that the assessee had not earned dividend income in the relevant year, given the department’s vie...