The meaning of in relation to under section 14A, 115BBA of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of in relation to.
Meaning of in relation to defined by court
The phrase “In relation to” used in section 14A, 115BBA of the Income Tax Act came up before various ITAT- Kolkata as detailed under :
1. Hon’ble ITAT-Kolkata explained the meaning of “annu In relation to” while delivering judgment in Pilcom Vs. ITO  77 ITD 218 (CAL.-TRIB.) as under :
Meaning: The expression ‘in relation to’ has a wide connotation and hence, if the amount guaranteed to be paid or payable bears any relation to any game or sports played in india, the same should come within the purview of section 115BBA.
2. Hon’ble ITAT-Kolkata explained the meaning of “In relation to” while delivering judgment in Dy. Cit V. S.G. Investments & Industries Ltd.  89 ITD 44 (KOL. – TRIB.) as under :
Meaning : Expression ‘in relation to’ used by the legislature in newly inserted section 14a is a broader expression having regard to the object behind the introduction of the provisions of section 14a,
which is inserted with an object (i) to disallow expenditure incurred in respect of exempt income against taxable income, (ii) to allow the expenses incurred only to the extent they are relatable to the earning of taxable income, and (iii) to allow the exemption in respect of the net income.
The expression ‘in relation to’ used in section 14a has both direct significance as well as indirect significance having regard to the context in which it is used.
3. Hon’ble ITAT-DELHI explained the meaning of “In relation to” while delivering judgment in Maruti Udyog Ltd. Vs. Dy. CIT  92 ITD 119 (DELHI – TRIB.) as under :
Meaning : The words ‘in relation to’ in section 14A would include any expenditure which is proved to have nexus directly or indirectly with the utilization of funds for earning tax-free income.
4. Hon’ble ITAT-DELHI explained the meaning of “In relation to” while delivering judgment in ACIT Vs. Eicher Ltd.  101 TTJ (DELHI – TRIB.) 369 as under :
Meaning : The words ‘in relation to income which is exempt under the act’, no doubt, appear to be broad at first impression, but on deeper examination, and read in conjunction with the word ‘incurred’, it seems that these are respective words, restricting the power of the assessing officer to estimate a part of the expenditure incurred by the assessee as relatable to the exempted income.
It seems that implicit in the expression ‘in relation to’ is the concept that the assessing officer should be in a position to pinpoint, with an acceptable degree of accuracy, the expenditure which was incurred by the assessee to produce non-taxable income. The word ‘incurred’ signifies that the expenditure must have been incurred actually, and not notionally.
5. Hon’ble Mumbai High Court explained the meaning of “In relation to” while delivering judgment in Yatish Trading Co. (P.) Ltd. Vs. Asstt. CIT  129 ITD 237/9 TAXMANN.COM 164 (MUM.) as under :
Meaning: The expression ‘in relation to’ used in section 14a means dominant and immediate connection or nexus. Thus, in order to disallow the expenditure under section 14a there must be a live nexus between the expenditure incurred and the income not forming the part of the total income.
6. Hon’ble Delhi High Court explained the meaning of “In relation to” while delivering judgment in Maxopp Investment Ltd. Vs. CIT  203 TAXMAN 364/15 TAXMANN.COM 390 (DELHI) as under :
Meaning : The expression ‘in relation to’ appearing in section 14a cannot be ascribed a narrow or constricted meaning. The expression ‘in relation to’ does not have any embedded object. It simply means ‘in connection with’ or ‘pertaining to’. If the expenditure in question has a relation or connection with or pertains to exempt income, it cannot be allowed as a deduction even if it otherwise qualifies under the other provisions of the said act.
In cit v. Walfort share and stock brokers (p.) Ltd.  326 Itr 1/192 taxman 211, the supreme court made it very clear that the permissible deductions enumerated in sections 15 to 59 are now to be allowed only with reference to income which is brought under one of the heads of income and is chargeable to tax.
The supreme court further clarified that if an income like dividend income is not part of the total income, the expenditure/deduction related to such income, though of the nature specified in sections 15 to 59, cannot be allowed against other income which is includible in the total income for the purpose of chargeability to tax.
Section 14A of Income Tax act
Expenditure incurred in relation to income not includible in total income.
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 Assessing Officer 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, if the Assessing Officer,
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 :
Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001.
Section 115BBA of Income Tax act
Tax on non-resident sportsmen or sports associations.
115BBA. (1) Where the total income of an assessee,—
(a) being a sportsman (including an athlete), who is not a citizen of India and is a non-resident, includes any income received or receivable by way of—
(i) participation in India in any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport; or
(ii) advertisement; or
(iii) contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or
(b) being a non-resident sports association or institution, includes any amount guaranteed to be paid or payable to such association or institution in relation to any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport played in India; or
(c) being an entertainer, who is not a citizen of India and is a non-resident, includes any income received or receivable from his performance in India,
the income-tax payable by the assessee shall be the aggregate of—
(i) the amount of income-tax calculated on income referred to in clause (a) or clause (b) or clause (c) at the rate of twenty per cent; and
(ii) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income referred to in clause (a) or clause (b) or clause (c) :
Provided that no deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the income referred to in clause (a) or clause (b) or clause (c).
(2) It shall not be necessary for the assessee to furnish under sub-section (1) of section 139 a return of his income if—
(a) his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) or clause (b) or clause (c) of sub-section (1); and
(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.
In this article, you can get guidance from high courts on the meaning of the in relation to under Section 115BBA, 14A of the Income Tax Act.
Updated up to Finance Act 2021 act under