2026 (9) TMI 384

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....mstances of the case, ITAT is justified in deleting the disallowance under section 14A of the I.T. Act amounting to Rs. 8,51,49,991/- 2.2 Whether for application of Section 14A of the Income Tax Act, 1961 the earning of exempt income is an essential legal requirement? 2.3 Whether the term in relation to' as used in Section 14A of the Act contemplates a direct and proximate nexus between ‟expenditure incurred' and earning of exempt income? 2.4 Whether ITAT is legally justified in deleting disallowance under section 14A of the Act because the assessee had not earned tax exempt income during the year, under considering the legislative intent of introduction of Section 14A by the Finance Act, 2001 and su....

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....l apply. Hence, the disallowing under section 14A read with Rule 8D has been rightly made while computing book profit under section 115JB of the Income Tax Act 1961?" 2. Mr. Jain, learned counsel appearing on behalf of the respondent-assessee, at the outset, submitted that so far as the first issue regarding deletion of disallowance under Section 14A of the Income Tax Act, 1961 (hereinafter referred to as "the Act of 1961") concerned, the same has been decided by this Court against the Department in the case of CIT vs. Caraf Builders & Constructions Pvt. Ltd. 101 Taxmann.com 167 and an SLP filed thereagainst also has been rejected by the Hon'ble the Supreme Court. 3. While adverting to question Nos. 2.7 and 2.8 relating to Section 40(....