No section 14A disallowance based on assumption of tax-free income in future

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.

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