Sec. 14A of Income Tax Act, 1961—Business Disallowance — The assessee has filed his return of income on 31/07/2012 declaring total income of Rs.NIL. The case was picked up for scrutiny and after serving statutory notice and seeking reply of the assessee, Assessing Officer noticed that assessee had borrowed money from various parties and interest thereof and thus made disallowance u/s.14A of the Act. Against the order of the AO, assessee preferred an appeal before CIT(A), who after considering the case of both the parties, dismissed the appeal filed by the assessee. The order of the CIT(A), now the assessee was further in appeal before Tribunal. On the facts when assessee has not made any claim for exemption of any income from the payment of tax, therefore, there cannot be any disallowance u/s.14A of the Act.  Also, the assessee has not made any claim for exemption of any income from payment of tax, thus Tribunal was also of the view that no disallowance u/s.14A of the Act ought to have been made by the AO.
Therefore, tribunal set aside the order of the CIT(A) and allow the ground of appeal raised by the assessee.  Appeal of the assessee was allowed. --- SHRAVANKUMAR GISULAL JAIN vs. ITO. [2020] 23 ITCD Online 69 (AHD)