ThynkTax /Tax Reference /Case Laws /Vatika Bank - Disallowance under Section 14A

Vatika Bank - Disallowance under Section 14A

High Court·2023·ITR
Facts

Section 14A disallowance where no exempt income was earned.

Issue

Whether disallowance applies in nil-exempt-income years.

Held

No - Section 14A is contingent on existence of exempt income. Mere potential or future exempt income is insufficient.

Ratio

Section 14A requires actual exempt income; theoretical applicability does not trigger disallowance.

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