2017 (4) TMI 298 - MADRAS HIGH COURT

Disallowance u/s 14A - as per Revenue he could disallow the expenditure even there is no income i.e., dividend by taking recourse to Rule 8D - Held that:- In the instant case, there is no dispute that no income i.e., dividend, which did not form part of total income of the Assessee was earned in the relevant assessment year.

Therefore, to our minds, the addition made by the Assessing Officer by relying upon Section 14 A of the Act, was completely contrary to the provisions of the said Section.

According to us, Rule 8D, only provides for a method to determine the amount of expenditure incurred in relation to income, which does not form part of the total income of the Assessee. Rule 8 D, in our view, cannot go beyond what is provided in Section 14 A of the Act. - Decided in favour of assessee