https://www.taxtmi.com/caselaws?id=470243 Disallowance of expenditure relating to exempt income under Section 14A read with Rule 8D cannot exceed exempt income earned for the relevant assessment year. Restricting the disallowance to that income reflects the settled legal position and constitutes a valid, reasonable explanation. Acceptance of a higher disallowance during assessment does not by itself establish under-reporting of income. Penalty for under-reporting is not automatic where the explanation falls within the exception for bona fide explanations under Section 270A(6)(a); consequently, the penalty was unsustainable and deleted. en-us Thu, 18 May 2023 00:00:00 +0530 Tue, 21 Jul 2026 15:05:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=470243 Disallowance of expenditure relating to exempt income under Section 14A read with Rule 8D cannot exceed exempt income earned for the relevant assessment year. Restricting the disallowance to that income reflects the settled legal position and constitutes a valid, reasonable explanation. Acceptance of a higher disallowance during assessment does not by itself establish under-reporting of income. Penalty for under-reporting is not automatic where the explanation falls within the exception for bona fide explanations under Section 270A(6)(a); consequently, the penalty was unsustainable and deleted. Case-Laws Income Tax Thu, 18 May 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=470243