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2022 (11) TMI 1205 - AT - Income TaxAddition u/s 14A r.w. Rule 8D - assessee had earned substantial dividend income - AO has made the addition by observing that where investment has been made in shares which did not yield any dividend income in the year under consideration, the expenditure incurred for earning income was deductible notwithstanding the fact that no such income has been earned - DR submitted that the assessee has capitalized substantial amount of interest paid by him on the amount invested, therefore, the amount of disallowance has to be calculated accordingly - HELD THAT:- Hon’ble ITAT, Delhi has taken a similar view in the cases of Mitsubishi Corporation India Pvt. Ltd. vs. DCIT [2015 (1) TMI 48 - ITAT DELHI] and LG- Chemical India Pvt. Ltd. [2014 (12) TMI 294 - ITAT DELHI] whereby the ITAT has deleted the additions made u/s 14A on the ground that no exempt income has been earned by the appellant. When the entire amount of dividend income of Rs.1,22,16,840/- has been offered for taxation by the assessee in its return of income and no exempt income has been claimed for AY 2015-16, then, the disallowance u/s 14A of the Act r.w.r. 8D of the Rules cannot be held as sustainable in view of the judgement of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] and in view of the judgement of CIT vs. Chettinad Logistics Pvt. Ltd. [2018 (7) TMI 567 - SC ORDER] Contention of DR that the assessee has capitalized huge amount of interest paid by him is concerned, this also show that the assessee has incurred expenditure of interest paid towards amounts used for investments in shares, but, has not claimed interest amount as revenue expenditure and has capitalized the same - instead of claiming expenditure on interest payment, the assessee has capitalized the same by enhancing the value of investment, therefore, no addition is called for u/s 14A of the Act r.w.r. 8D of the Rules in this regard. In view of the above, we are unable to see any ambiguity, perversity or any other valid reasons to interfere with the findings of the ld.CIT(A). The ground raised by the Revenue is dismissed.
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