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2019 (11) TMI 745 - ITAT AHMEDABADDisallowance u/s. 14A r.w. Rule 8D - assessee has claimed before the ld. CIT(A) that he was engaged in the business of trading in shares and securities and the provisions of the section 14A were not applicable to it - HELD THAT:- After considering the decision of the Hon’ble Supreme Court in the Maxopp case [2018 (3) TMI 805 - SUPREME COURT], it is clear that the principle of apportionment of the expenditure was applicable and the expenditure apportioned to the exempt income or income not eligible to tax was not allowable as a deduction. Provision of section 14A is applicable even when the shares are held ‘stock in trade’ though incidentally certain dividend income is earned, therefore, the contention of the ld. counsel about the applicability of ACIT Vs. Punjab National Bank [1764562] is not acceptable. We consider that the decision of the Hon’ble Supreme Court in Maxopp Investment Ltd. vs. CIT has settled the law that relevant expenditure in case of exempt income has to be apportioned between taxable and non-taxable income. In the case of the assessee, the total exempt income earned during the year is ₹ 22,01,928/- as per note 10 attached to the profit and loss statement for the year ended 31st March, 2014 and share dividend account placed at page 42 of the paper book. We consider that Hon’ble Delhi High Court in the case of Joint Investment Pvt. Ltd. Vs. CIT [2015 (3) TMI 155 - DELHI HIGH COURT] held that disallowance u/s. 14A cannot exceed the actual exempt income - we restrict the impugned disallowance to the extent of income of ₹ 2,21,928/- , therefore, appeal of the Revenue is partly allowed.
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