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2021 (6) TMI 668 - ITAT HYDERABADDeduction u/s 80IA - Claim restricted to extent of income from business and profession - AO be directed to allow the claim of deduction under section 80IA of the Act against the gross total income - HELD THAT:- The assessee is not eligible to claim the deduction u/s 80IA of the Act. The legislature has clearly spelt out in the deduction provisions that which incomes are eligible to claim deduction u/s 80IA, and therefore, the assessee cannot go beyond the provisions and claim deduction u/s 80IA. The deduction provisions should be interpreted strictly and if there is any ambiguity, it goes to in favour of revenue - See RAMNATH & CO. VERSUS THE COMMISSIONER OF INCOME TAX [2020 (6) TMI 158 - SUPREME COURT] - Accordingly, the assessee is not eligible to claim deduction u/s 80IA from the income from house property as claimed. Thus, we dismiss the ground no. 1 raised by the assessee on this issue. Disallowance u/s 14A - HELD THAT:- It is a settled position that disallowance of expenditure u/s. 14A read with Rule 8D shall not exceed exempt income earned for the year as per case law Joint Investment Pvt. Ltd.[2015 (3) TMI 155 - DELHI HIGH COURT]. The assessee earned exempt income of ₹ 42,35,977/- as per computation of income. Therefore, we direct the AO to restrict the disallowance u/s 14A rwr 8D to ₹ 42,35,977/-. Disallowance u/s 14A rwr 8D(2)(ii) and (iii) - value of investments should be considered only on the investments from which the assessee has earned exempt income - HELD THAT:- As relying on TRANSPORT CORPORATION OF INDIA LTD. [2016 (11) TMI 245 - ITAT HYDERABAD] We direct the AO to recalculate the disallowance as per rule 8D as per the above guidance. We further direct the AO if the disallowance u/s 14A is higher in the recalculation made by the AO, the same shall be restricted to the extent of exempt income earned by the assessee as per the case law Joint Investment Pvt. Ltd[2015 (3) TMI 155 - DELHI HIGH COURT] Dividend income should be treated as income from other sources is also not correct - Assessing Officer himself has treated it as a dividend income which is exempt and on other hand, he has treated as daily dividend income and taxed under the income from other sources. While recalculating disallowance u/s 14A, we have restricted the disallowance to the extent of exempt earned by the assessee or less than the exempt income, whichever is lower and the same amount cannot be taxed as income from other source, which amounts double taxation in the hands of the assessee. The dividend amount received by the assessee is exempt as per section 10(35) of the IT Act.
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