Only those exp. which was proved to be incurred relating to earning of exempt income to be disallowed

INCOME TAX : In terms of section 14A, only expenditure, which was proved to be incurred in relation to earning of tax free income, could be disallowed and such provision could not be extended to disallow expenditure, which was assumed to have been incurred for earning tax free income. To apply provisions of section 14A, Assessing Officer should have recorded a finding as to how sub-section (1) of section 14A would stand attracted.

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