disallowance u/s 14

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TRIBHUVAN PUROHIT

TRIBHUVAN PUROHIT (Querist)
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09 October 2010 Will anybody please explain this disallowance in depth
Thanks in advance.

Guest

Guest (Expert)

09 October 2010 [Expenditure incurred in relation to income not includible in total income.

SECTION 14A.

(1) For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act.

(2) The AO shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed SEE RULE 8D, if the AO, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act.

(3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act.