Tribunal Flags Error in Applying Section 14A to Non-Yielding Investments

Hincon Holdings Ltd. Vs ITO (ITAT Mumbai) Stock-in-Trade Isn’t Investment: ITAT Mumbai Remands 14A Disallowance for Fresh Verification Mumbai ITAT (SMC Bench) held that while computing disallowance u/s 14A r.w.r. 8D, shares and mutual funds held as stock-in-trade must be excluded, and only those investments which actually yielded exempt income can be considered. The assessee, an NBFC, earned dividend income of ₹11.93 lakh from mutual funds held as stock-in-trade, whereas the AO mechanically computed disallowance by including non-current investments which had not yielded any exempt income, ...