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2014 (12) TMI 966 - AT - Income TaxDisallowance u/s 14A - Carry forward of business loss – Held that:- The carry forward business loss was set off to the extent of available business income and thereby the total income was computed at Nil – the AO made certain disallowances u/s 14A and accordingly computed the total income of the assessee as against the Nil return of income - since the AO computed the total income by making the addition to the extent of ₹ 38,20,860/-, therefore, the carry forward business losses to the extent of ₹ 6,39,538/- should have been set off instead of ₹ 6,21,615 - the carry forward losses ought to have been set off to the extent of the available business income - when the AO has made the addition of more than 38 lakhs then to that extent the carry forward business losses of the assessee should have been set off - setting off carry forward business losses now depends on the finality of the addition made by Assessing Officer u/s 14A - the allowability of setting off the carry forward business losses depends upon the total income as per the outcome of the appeal. Whether section 14A is attracted in respect of the investment made in shares albeit no exempt income is earned by the assessee on such investment - Held that:- The assessee has not received/earned any exempt income during the year - there is no claim of exempt income by the assessee during the year – relying upon Commissioner of Income Tax-IV Versus Holcim India P. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] - the entire or whole expenditure has been disallowed as if there was no expenditure incurred by the assessee for conducting business - CIT(A) has positively held that the business was set up and had commenced - Expenditure had to be also incurred to protect the investment made - genuineness of the expenses and the fact that it was incurred for business activities was not doubted by the AO and has also not been doubted by the CIT(A) - Decided in favour of assessee.
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