ITAT Deletes section 14A disallowance made without following procedures

Standard Chartered Grindlays Bank-Tax Department Vs DCIT (ITAT Delhi) The issue under consideration is whether CIT(A) is correct in disallowing managerial and administrative expenses for earning dividend income by treating this as tax free income? ITAT states that, the basic principle of taxation is to tax the net income, i.e., gross Income minus expenditure. On the same analogy, exemption is also in respect of net income. The theory of apportionment of expenditure between taxable and non-taxable has, in principle, been now widened under section 14A. ITAT find that the AO has disallowed the am...