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2019 (3) TMI 530 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D - claim exceeding exempt income of the relevant year - HELD THAT:- It is an undisputed fact that assessee has incurred expenditure on account of interest etc., for making investment in shares of various companies to the extent of ₹ 2.37 crores and has not earned any any exempt income. We find that in the case of PCIT Vs. State Bank of Patiala [2018 (4) TMI 23 - PUNJAB & HARYANA HIGH COURT] has held that the amount of disallowance u/s 14A has to be restricted to the amount of exempt income only and not at a higher figure. We find that against the aforesaid order of Punjab and Haryana High Court, Revenue filed S.L.P. before the Hon’ble Apex Court and the S.L.P. was dismissed by the Hon’ble Apex Court. In the case of PCIT Vs Caraf Builders & Construction (P) Ltd. [2018 (12) TMI 410 - DELHI HIGH COURT] after considering the decisions of Maxopp Investment Ltd. Vs. CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA], Cheminvest Vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] and other decisions has held that disallowance u/s 14A cannot exceed exempt income of the relevant year. In the present case, since assessee has not earned any exempt income from dividends, no disallowance is called for in the present case. - Decided in favour of assessee.
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