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Income Tax

Income Tax Act, 1961 — S. 14-A — Disallowance on expenditure incurred for earning tax-free income in cases where assessees do not maintain separate accounts for the investments and other expenditures incurred for earning the tax-free income

ByAdvocate Raji Nathani

The proportionate disallowance of interest is not warranted under S. 14-A for investments made in tax free bonds/securities which yield tax-free dividend and interest to assessee Banks in those situations where, interest-free own funds available with the assessee, exceeded their investments. Held, agree with the view taken by learned ITAT. Para 31

[South Indian Bank Ltd. v. CIT, (2021) 10 SCC 153]

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By Advocate Raji Nathani

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