Is deduction admissible in respect of expenditure which has proximate nexus with income that does not form part of total income?

Last updated: 05 August 2021

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The Income Tax Appellate Tribunal has recalled a previous order concerning Dhanuka Labs Limited. The original order had restored an issue regarding Section 14A of the Income Tax Act to the Assessing Officer for fresh consideration, based on the incorrect premise that the assessee earned exempt dividend income. The Tribunal acknowledged that the assessee had indeed not earned any such income, deeming it a mistake apparent on the record. Consequently, the order was recalled to ensure justice.

Court :
ITAT Delhi

Brief :
Assessee preferred this Miscellaneous Application to recall the order dated 18/08/2017 passed by this Tribunal in ITA No. 3898/Del/2014 for the assessment year 2009-10, stating that the Tribunal set aside the impugned order passed by the Ld. CIT(A) and restored the issue relating to section 14A of the Income Tax Act, 1961 (for short “the Act”) read with Rule 8D of the Income Tax Rules1962 (“the Rules”) to the file of the learned Assessing Officer for fresh consideration, on the premise that during the relevant financial year the assessee earned certain amount of dividend income claimed as exempt, whereas, as a matter of fact, the assessee did not earn any such income.

Citation :
ITA No. 3898/Del/2014

Daily Limit Reached