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2021 (9) TMI 643 - ITAT PUNEDisallowance u/s 14A - CIT(A) restricted the disallowance with a direction to rework the disallowance under Rule 8D(2)(ii) of the Income Tax Rules - main contention of ld. AR is that the disallowance should not exceed the exempt income earned - HELD THAT:- As decided in M/S. NIRVED TRADERS PVT. LTD. [2019 (4) TMI 1738 - BOMBAY HIGH COURT] as relying on CHEMINVEST LIMITED [2015 (9) TMI 238 - DELHI HIGH COURT] limiting the disallowance to the exempt income earned therein. In the present case as discussed above, there is no dispute that the assessee earned exempt income and by applying the decision of Hon'ble High Court of Bombay we restrict the disallowance to the extent exempt income earned. Accordingly, the order of CIT(A) is set aside and the grounds raised by the assessee in this regard are allowed. Seeking deduction paid towards Education Cess under Finance Act while computing the taxable income - HELD THAT:- We note that the assessee paid Education Cess while computing the taxable income under normal provision of the I.T. Act. The Hon'ble High Court of Bombay in the case of Sesa Goa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT] was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act.. Therefore, in view of the above decision, we direct the AO to allow deduction in respect of Education Cess paid by the assessee. Accordingly, the additional ground raised by the assessee is allowed.
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