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2023 (4) TMI 734 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D(iii) - As submitted that assessee had not earned any income which is exempt and not includible in the total income of the assessee for the year - HELD THAT:- Admittedly, it is a fact on record that assessee had reported long-term capital gains as taxable income in the return form, taxable at the rate of 20% which was set off against the business loss of the current year. It is also a fact as noted from the return form, that assessee had not earned any income, exempt from tax and not includible in the total income for the year. AO has computed the disallowance under section 14A of the Act read with rule 8D(iii) on a misconceived fact that assessee has earned long-term capital gains which is exempt under the Act. We find that on this misconceived fact of assessee having earned exempt income, disallowance made by the Ld. AO under section 14A read with rule 8D(iii) is not warranted since the correct fact in the matter is that assessee has not earned any exempt income during the year. Decided in favour of assessee.
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