Exempt income is not subject to MAT adjustment. Where non-interest bearing funds were more than exempt income investments, no proportionate interest disallowance to be made. Only exempt income yielding investments have to be taken into consideration whilst computing administrative expenses disallowance. (AY. 2012-13, 2013-14)
Electrosteel Castings Ltd. v. DCIT (2021)189 ITD 183 (Kol.)(Trib.)
S. 14A : Disallowance of expenditure-Exempt income-Not subjected to MAT adjustment-More non-interest bearing funds-No disallowance can be made-Only exempt income yielding investments have to be taken into consideration whilst computing administrative expenses. [S. 11JB, R. 8D(2)(iii)]