Section 14A disallowance cannot Exceed Exempt Income: ITAT Mumbai

S. Vinodkumar Diamonds, Pvt Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether the disallowance u/s 14A can exceed the exempt income? ITAT states that during the year under consideration the assessee has earned exempt income of Rs. 1.62 lakhs only. The AO disallowed interest expenses under Rule 8D(ii) of Rs. 30,13,853/-. They have perused the profit and loss account of the assessee copy of which is available in the paper book filed by the assessee. They have noted that the assessee’s reserves and surpluses as on 31.03.2007 is Rs. 93.24 Crore and share capital of Rs. 9.8 Cror...