Case Law Details
PCIT Vs M/s Trident Limited (Punjab and Haryana HC)
The issue under consideration is whether the AO is correct in disallowance made u/s 14A irrespective of the fact that assessee do not have any Exempt Income during the Year?
In the present case, AO noticed that assessee-company made investments in various equity funds and shares of different companies and took huge loans and was investing indirectly from the said loan funds. Accordingly, he made disallowance under section 14A. But Assessee do not have earned any exempt income during this year, not even claim anything in return filed.
High Court based on judgment of Principal Commissioner of Income Tax-I, Chandigarh v. M/s Vardhman Chemtech Private Limited, Chandigarh states that that Section 14A of the Act cannot be resorted to in the year in which no exempt income had been earned. Hence dismissed the appeal of the revenue holding that unless and until there is receipt of exempted income for the concerned assessment year, Section 14A of the Act is not attracted.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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