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2023 (8) TMI 433 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Disallowance of expenditure incurred on earning exempt income - AO has recorded a finding that assessee has no exempt income during this year, but he disallowed the expenditure on the ground that on the investment in business, in future the assessee will earn tax-free income, thus expenditure attributable to tax-free anticipated income deserves to be disallowed u/s 14A r.w.r. 8D - HELD THAT:- We are of the view that this view of the AO is contrary to the judgment of M/s. Era Infrastructure Limited [2022 (7) TMI 1093 - DELHI HIGH COURT]. The Hon’ble Delhi High Court has considered the latest amendment brought in section 14A by way of Finance Act, 2022 and thereafter held that if an assessee has no tax-free income, then no expenditure would be disallowed to it. We allow this ground of appeal for the assessment year and delete the disallowance. Appeal of the assessee is allowed.
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