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2011 (7) TMI 1197 - HC - Income TaxQuantum of Deduction u/s 80M r/w 80AA - Revenue submitted that while determining the quantum of deduction admissible to the assessee u/s 80M, the expenditure incurred relating to the earning of dividend income has to be excluded therefrom - Reliance was placed on Section 14A which was incorporated by Finance Act 2001 retrospectively w.e.f. 1.4.1962 - HELD THAT:- Finance Act 2001 had inserted Section 14A with effect from 1.4.1962. According to the said Section, any expenditure incurred by the assessee for earning income which did not form part of the total income under the Act was not to be allowed as expenses. The Court in the case of PUNJAB STATE CO-OPERATIVE MILK PRODUCER'S FEDERATION LTD. VERSUS COMMISSIONER OF INCOME-TAX-II [2011 (3) TMI 615 - PUNJAB AND HARYANA HIGH COURT], while defining the scope of Section 14A, incorporated retrospectively w.e.f. 1.4.1962, the apex Court had specifically recorded that the theory of apportionment of amount of expense between taxable and non taxable income stood widened by incorporation of Section 14A. It was further noticed that the expression ‘expenses incurred’ occurring in Section 14A referred to tax, salary, interest etc. in respect of which allowances are provided for under Sections 30 to 37. In all fairness to assessee, section 14A as incorporated by Finance Act 2001, with effect from 1.4.1962, was not under consideration and, therefore, the same do not come to the rescue of the assessee - Decision against Assessee.
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