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2017 (6) TMI 62 - AT - Income TaxDisallowance u/s 14A - whether the amount of disallowance u/s 14A cannot be exceeded the exempt income? - Held that:- As held in the case of Maxopp Investment Ltd. Vs. CIT (2011 (11) TMI 267 - Delhi High Court) it is not the purpose of the expenditure which is relevant. Once exempt income is earned, it means that some expenditure being incurred in relation to the exempt income which should be disallowed by applying formula laid down in rule 8D(2)(iii). Therefore, action of the AO is correct in applying rule 8D(2)(iii) but the amount of disallowance should be restricted to the dividend income. Thus we set aside the order of ld.CIT(A) and direct the AO to restrict the disallowance to ₹ 17,50,000/- i.e. exempt income earned by the Appellant during the year under consideration” only. The appeal of the assessee is allowed. Rental income - taxed as income from house property OR business income - Held that:- The case of the assessee stands covered in favour of the revenue and against the assessee by a decision of Reliance Infrastructure & Consultants Ltd., V/s ACIT [2012 (10) TMI 1144 - ITAT MUMBAI] as relying on Reliance Infrastructure & Consultants Ltd., V/s ACIT [2003 (1) TMI 99 - SUPREME Court] as relying on case of Shambhu Investment Pvt Ltd V/s CIT reported (2003 (1) TMI 99 - SUPREME Court ) came to the conclusion that the rental income has to be taxed as income from house property and not business income - Decided against assessee.
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