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2023 (6) TMI 1115 - AT - Income TaxDisallowance u/s.14A - Addition as against the exempt income which is out of the dividend income earned by the assessee - HELD THAT:- This issue before us is no longer res integra as various courts including the Hon'ble Apex Court has held that disallowance u/s.14A read with rule 8D should not exceed the exempt income earned by the assessee. As decided in the case of Chalet Hotels Ltd. [2021 (1) TMI 1134 - ITAT MUMBAI] wherein on similar facts where the assessee had made suo moto disallowance more than that of the exempt income earned for that year, it was held that the disallowance should be only to the extent of the exempt income earned and not more than that. We are of the considered view that disallowances u/s.14A r.w.r. 8D is to be restricted only to the extent of the exempt income earned by the assessee during the impugned year. We, therefore, direct the A.O. to recompute the income of the assessee accordingly. Hence, the ground raised by the assessee is allowed.
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