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Disallowance u/s 14A

Tax queries 521 views 2 replies

What is the situation of applicability of Section 14A of Income tax Act, 1961 in case there is no exempted income during the year. Whether Assessing Officer is right to compute disallowance of proporationate interest paid on the basis of investment made by the company in subsidiary and other group companies but no income has arised on such investment during the year.

Ramesh Sharma

Replies (2)
Mr.Ramesh SharmaQ There are judgments in favour of the department. Best Wishes Sathikonda
Dear Ramesh, I think AO can challenge the Interest u/s 37(1) that the amount was not for exclusively for business of the assessee... But in no case AO can invoke Sec 14A since no tax free income is involved in the present case.


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