Section 14A disallowance based on presumptions of earning dividend income in future is unsustainable 

Zodiac Ventures Ltd. Vs ITO (ITAT Mumbai)

he recent judgment by the Income Tax Appellate Tribunal (ITAT) Mumbai in the case of Zodiac Ventures Ltd. vs Income Tax Officer (ITO) has significant implications for tax law, particularly regarding Section 14A disallowance based on presumptive future dividend income. This decision addresses the contentious issue of whether disallowances under Section 14A can be justified in the absence of actual exempt income. The Tribunal’s ruling highlights the importance of not applying Section 14A presumptively and reinforces the principle that t

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