Case Law Details
Bagdevi Suppliers Pvt. Limited Vs ITO (ITAT Kolkata)
If there is no tax-free income to the assessee, then no disallowance is to be made under section 14A of the Income Tax Act based on assumption that in future, some tax-free income will result to the assessee on the investment.
Assessee has submitted that the ld. Assessing Officer has erred in making an addition of 91,750/- under Rule 8D read with section 14A as much as Income Tax Rules, 1962 and Income Tax Act, 1961.
ITAT find that there is no tax-free income claimed by the The ld. Assessing Officer has worked out the disallowance on his assumption that in future, some tax-free income will result to the assessee on the investment. As per the decision of the Hon’ble Delhi High Court passed in ITA No. 204 of 2022, if there is no tax-free income to the assessee, then no disallowance is to be made under section 14A of the Income Tax Act.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
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