ITAT Panjim says Section 14A Disallowance Must Exclude Investments Incapable of Exempt Income

The ITAT, Panaji Bench, disposed of cross-appeals involving Sesa Resources Limited for AYs 2008-09 to 2012-13. It directed a fresh computation of administrative expenditure disallowance under Section 14A, restricting the investment base to investments capable of generating exempt income and capping the disallowance at the exempt income earned. The Tribunal also allowed the foreign exchange loss on genuine cancelled forward contracts, upheld the revenue treatment of ship repairs and mining-related expenditure, and rejected several Revenue challenges concerning TDS, depreciation and capital gains.