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2015 (11) TMI 1875 - ITAT CHANDIGARHAddition u/s 14A r.w.r. 8D - Expenditure incurred on earning exempt - HELD THAT:- In the instant case, the income from dividend has been shown at Rs. 9,23,660/-, disallowance u/s 14 A read with Rule 8 D worked out by the AO comes to Rs. 24,53,928/-. Thus it is clear that the AO has disallowed the entire ‘tax exempt income’ which is not permissible in view of the judgment of JOINT INVESTMENTS PVT LTD VERSUS COMMISSIONER OF INCOME TAX [2015 (3) TMI 155 - DELHI HIGH COURT]. The Hon’ble Delhi High Court held that the window for disallowance is indicated in section14 A, and is only to the extent of disallowing expenditure “ incurred by he assessee in relation to the tax exempt income”. The disallowance under section 14 A read with Rule 8 D as worked out by the AO is not in accordance with law and as such working is not sustainable. In view of the above we uphold the order of the Ld. CIT(A) restricting the disallowance u/s 14A to Rs. 9,23,660/-.
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