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2021 (3) TMI 157 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - exclusion of income derived from strategic investments for the purpose of computation of disallowance - HELD THAT:- The observation on i.e. exclusion of tax exempt income derived from a strategic investments, is not a correct view in the light of the decision of the Supreme Court in Maxopp Investment Ltd. Vs. Commissioner of Income Tax, [2018 (3) TMI 805 - SUPREME COURT]. Accordingly, the observations are set aside. However, its observations with respect to the calculation of disallowance under Section 14A being confined to investments that derived tax exempt income are valid in the light of the Division Bench ruling in ACB India Ltd. v. ACIT,[2015 (4) TMI 224 - DELHI HIGH COURT] - In view of the above clarification, the ITAT's order, to the extent that it makes observations with respect to exclusion of income derived from strategic investments, is hereby set aside. Deduction in respect of 'Education Cess' and 'Secondary and Higher Education Cess' - HELD THAT:- Keeping in view the provisions of the Act pertaining to Section 40(a)(ii) and Section 115JB, Circular of the CBDT No. 91/58/66-ITJ(19), the orders of Co-ordinate Benches of ITAT and judicial pronouncements of the Hon'ble High Court of Bombay and Hon'ble High Court of Rajasthan, we hereby direct the revenue to consider the claim of deduction of the 'Education Cess' as per the provisions of Section 37 of the Income Tax Act.
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