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Informative

Disallowance of Expenses u/s 14A for Exempt Dividend Income: ITAT deletes Rs.33.75 Lakh

Update / Judgement Date

12 Jan 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Income Tax

The ITAT deleted a disallowance of Rs. 33.75 lakh under Section 14A concerning exempt dividend income. The taxpayer had incurred expenses related to earning exempt income, which the AO sought to disallow. However, the tribunal ruled that these expenses should not be disallowed as they were directly linked to the earning of exempt dividend income. This ruling clarifies the application of Section 14A and reinforces that expenses related to earning exempt income should not automatically be disallowed.