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2018 (9) TMI 772 - AT - Income TaxDisallowance u.s 14A - Allowable deduction u/s 37(1) - investment advisory fees paid to Tusk Investment Fund 1 and Tusk Investment Fund 2 - AO and CIT-A held that the investment advisory fees paid to Tusk Investment Fund 1 and 2 respectively are for earning tax free income and hence cannot be allowed deduction u/s 14A - Held that:- In the present case, it not in dispute that the AO made the disallowance u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962. It is also noticed that the assessee although earned the dividend income of ₹ 18,48,394/- which was claimed as exempt, but the disallowance was made by the assessee suo motto u/s 14A r.w. Rule 8D of the Income Tax Rules, 1962 for a sum of ₹ 29,44,969/-, the said fact has been accepted by the AO at page no. 4 of the assessment order dated 03.11.2014. It is well settled that as per the ratio laid down by the Hon’ble Jurisdictional High Court in the case of Joint Investment (P.) Ltd. Vs CIT [2015 (3) TMI 155 - DELHI HIGH COURT] that the disallowance u/s 14A of the Act can be made only to the extent of exempt income In the present case, since the assessee suo motto made the disallowance of ₹ 29,44,969/- u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962, more than the exempt income claimed at ₹ 18,48,394/-. Therefore, no further disallowance was called for. - Decided in favour of assessee.
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