Section 14A Amendment in 2022 Prospective – No Disallowance if No Exempt Income: ITAT Kolkata 

Sreeleathers Limited Vs DCIT (ITAT Kolkata)

ITAT Kolkata held that no disallowance u/s 14A r.w. Rule 8D can be made where Assessee has not earned any exempt income during the year.

AO had made a disallowance of ₹47.43 lakh despite Assessee’s submission that no dividend or exempt income was earned & that investments were in taxable debt mutual funds. CIT(A) upheld the addition relying on CBDT Circular No. 5/2014.

Tribunal noted that the amendment to Section 14A by Finance Act, 2022 introducing a non obstante clause &am

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