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2022 (1) TMI 680 - ITAT PUNEDisallowance u/s 14A r.w Rule 8D - suo moto disallowance made by assessee - Whether disallowance u/s 14A be restricted to the extent of the exempt dividend income? - HELD THAT:- We are principally in agreement with the claim of the ld. A.R that the amount of disallowance u/s 14A cannot exceed the amount of the exempt income - the disallowance u/s 14A be restricted to the amount of the exempt dividend income that was received by the assessee during the year, therein, direct the A.O accordingly. Amount paid by an assessee towards “Education Cess” or any “Other cess” viz. the Secondary and Higher Education Cess - Whether disallowable expenditure u/s 40(a)(ii) ? - HELD THAT:- We find that the said issue is squarely covered by the recent order of the Hon’ble High Court of Bombay in the case of Sesa Goa Limited [2020 (3) TMI 347 - BOMBAY HIGH COURT] had concluded that now when the legislature had not provided for any prohibition on the deduction of any amount paid towards “cess” in clause (ii) of Sec. 40(a), therefore, holding to the contrary would amount to reading something which is not to be found in the text of the provision of Sec. 40(a)(ii). Accordingly, the Hon’ble High Court had concluded that there was no prohibition on the deduction of any amount paid towards “cess” in Sec. 40(a)(ii), while computing the income chargeable under the head “profits and gains of business or profession”. We therein conclude that as “Education Cess” and Secondary and Higher Education Cess is not disallowable as a deduction u/s 40(a)(ii) of the Act, therefore, the claim of the assessee seeking deduction of the same while computing its income for the year under consideration merits acceptance. The “additional ground of appeal no. 3 raised by the assessee is allowed.
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