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2015 (11) TMI 1667 - AT - Income TaxDisallowance under section 14A computation - total exempt income earned by the present assessee is ₹ 13,35,040 against which an addition of ₹ 21,87,713 has been made by AO u/s 14A - Held that:- As noted in the case of Joint Investment (P) Ltd. vs CIT (2015 (3) TMI 155 - DELHI HIGH COURT) the disallowance u/s 14A should not exceed the exempt income. The Tribunal also noted that the Hon’ble Delhi high Court in the case of CIT vs Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT ) held that there can be no disallowance u/s 14A in the absence of any exempt income. Thus the disallowance should not exceed the exempt income during the relevant financial period. In the present case, since the total exempt income of the assessee is ₹ 13,35,040 and the assessee had suo moto offered disallowance of ₹ 1,81,388 under Rule 8D(2)(iii) of the Income Tax Rules, 1962 being 0.5% of the average value of the investment in the shares of Apollo Tyres Ltd. on which such dividend income was earned. Hence, we direct the Assessing Officer that the disallowance u/s 14A be restricted to ₹ 11,53,752 (Rs. 13,35,040 – ₹ 1,81,388) and the remaining amount of disallowance is directed to be deleted. - Decided partly in favour of assessee.
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