2016 (10) TMI 1039 - BOMBAY HIGH COURT

Disallowance u/s 14A - Held that:- Both the Authorities have recorded a clear finding of fact that there was no exempt income earned by the assessee as relied on the judgment in Cheminvest Limited Versus Commissioner of Income Tax-VI [2015 (9) TMI 238 - DELHI HIGH COURT] which holds that the expression “does not form part of the total income” in Section 14A envisages that there should be an actual receipt of the income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income.

The Income Tax Appellate Tribunal correctly held that the provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Officer that any actual income was received by the assessee and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the assessee in the sister concerns were not the actual income received by the assessee, they could not have been included in the total income. No substantial question of law.