Disallowance under Section 14A for investment as share application money: nexus to actual exempt income required, notice issued Section 14A disallowance was considered in relation to investments made as share application money that produce only exempt income. The legal reasoning ...
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Disallowance under Section 14A for investment as share application money: nexus to actual exempt income required, notice issued
Section 14A disallowance was considered in relation to investments made as share application money that produce only exempt income. The legal reasoning follows the view that disallowance under Section 14A must be linked to expenses proportionate to the earning of exempt income, applying the actual income earning test from precedent. Consequently, where an investment yields only exempt income, any expense disallowance requires a demonstrated nexus and proportionate allocation to that exempt income. The text records notice issued consistent with these legal propositions.
The Supreme Court of India issued a notice in a case tagged with SLP (C) No. 2292 of 2019. No representation was made by the respondent. Justices S. Abdul Nazeer and Krishna Murari were presiding over the case.
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