2009 (8) TMI 220 - PUNJAB AND HARYANA HIGH COURT

Disallowance of expenditure in relation to income which does not form part of total income - The assessee is engaged in manufacture and sale of cotton yarn. – Assessee made investment in shares using its own funds - During assessment, the Assessing Officer applied section 14A and disallowed interest on the amount of investment in shares on the ground that since dividend income is exempt from tax - Admittedly, the assessee did not make any claim for exemption. In such a situation, section 14A could have no application. - No substantial question of law arises. - The revenue’s appeal is dismissed.