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2019 (3) TMI 572 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D - disallowance of interest u/s 14A and on account of other expenses under Rule 8D(2)(iii) - disallowance exceeding exempt income - HELD THAT:- We find 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 of the Act has to be restricted to the amount of exempt income only and not at a higher figure. also confirmed by Hon’ble Apex Court. Also 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 earned exempt income from dividends only to the extent of ₹ 3,705/-, we relying on the aforesaid decisions direct the disallowance u/s 14A of the Act be restricted to the extent of exempt income i.e., ₹ 3,705/-. - Decided partly in favour of assessee.
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