The assessee claimed a loss which included the interest on borrowed funds for investment. \u00a0Since the investments in yielded dividend which was exempt from the total income, the AO made a disallowance under S.\u00a014A\u00a0and the balance under S.\u00a057(iii)\u00a0for diverting funds for non-business purposes. The CIT(A) deleted the addition since there was no dividend earned by the assessee and there was no diversion of funds, for non-business purposes. He held that in the absence of dividend there was no case for making the disallowance under S.14A. Dismissing the appeal of the revenue the Tribunal held that the AO invoked S.14A\u00a0read with rule\u00a08D\u00a0of the\u00a0Income-tax Rules, 1962\u00a0incorrectly and made the disallowance without the assessee having earned the dividend. \u00a0Hence no disallowance was called for under S.\u00a014A\u00a0in the absence of dividend. \u00a0(AY.2012-13, 2013-14).<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 14A : Disallowance of expenditure-Exempt income-No disallowance can be made in absence of dividend income. [S.57(iii), R. 8D]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8511","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-2dh","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=8511"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8511\/revisions"}],"predecessor-version":[{"id":8512,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8511\/revisions\/8512"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=8511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=8511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=8511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}