Section 14A applies also to strategic investments in subsidiaries; No estoppel against a statute

Section 14A applies also to strategic investments in subsidiaries The assessee has earned dividend income of Rs. 2,58,64,934/- which was claimed exempt from tax. The assessee has claimed that no expenditure has been incurred by the assessee in relation to the earning of exempt income. The authorities below applied Rule 8D of Income-tax Rules, 1962. In our considered view , Rule 8D of Income-tax Rules, 1962 is not applicable for the impugned assessment year 2007-08 , while reasonable disallowance is to be made of expenditure incurred in relation to the earning of income which does not form part...