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2018 (2) TMI 433 - AT - Income TaxAddition u/s 14A - earning of exempt income - suo-motu disallowance - Held that:- As assessee has earned dividend income for which no disallowance has been made by assessee in the return of income filed, as per section 14A(1), computation has to be adopted as per Rule 8D of the Income Tax Rules,1963. On perusal of the computation made by the AO, it is observed that the disallowance made is more than exempt income. Hon’ble Delhi High Court in the case of Cheminvest Pvt. Ltd. vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] wherein it has been held that disallowance under Rule 8D cannot exceed the exempt income. Therefore in our considered opinion the disallowance needs to be recomputed. As there are no expenses other than the expenses recorded in Schedule 10 to P&L account, we find it appropriate to restrict the disallowance to a sum of ₹ 10,000/- which could be attributed to earning of exempt income. - Decided against assessee.
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