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2017 (4) TMI 1095 - AT - Income TaxDisallowance u/s 14A - Held that:- In view of Section 14A of the Act, there cannot be any deduction in respect of expenditure incurred by the assessee in relation to income which does not form part of total income. For the purpose of computation of disallowance, the rule making authority, by virtue of power conferred on them, provided a method under Rule 8D(2) of Income-tax Rules, 1962. Whenever the Assessing Officer having regard to the account of the assessee, was not satisfied the correctness of claim that expenditure incurred by the assessee or the claim made by the assessee that no expenditure was incurred in relation to the income which does not form part of total income, he may determine the amount of expenditure in relation to such income in accordance with the method found in Rule 8D(2). The constitutional validity of Section 14A of the Act and Rule 8D of Income-tax Rules, 1962 was upheld by various High Courts in the country. The Madras High Court in Redington (India) Ltd. (2017 (1) TMI 318 - MADRAS HIGH COURT ) found that by application of matching concept, where there is no exempt income, there cannot be any disallowance of expenditure. - Decided in favour of assessee
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