Tribunal held that, no disallowance of expenses relating to dividend received from foreign companies taxable in India and offered to tax . Strategic investments or investments in subsidiary companies or group or associated companies in India or companies promoted by assessee is includible in disallowance however disallowance not to exceed exempt income .( AY.2012-13)
Lakshmi Machine Works Ltd. v. Add. CIT (2020)78 ITR 398 (Chennai ) (Trib)
S. 14A : Disallowance of expenditure – Exempt income – No Disallowance of expenses relating to dividend received from foreign companies taxable in India and offered to tax – Strategic investments or investments in subsidiary companies or group or associated companies in India or companies promoted by assessee — Includible in disallowance — Disallowance not to exceed exempt income [ R.8D(2)(iii) ]