TMI Blog2015 (1) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical fact in earlier years, no disallowance was made. In the present assessment year also, no borrowed funds were invested by the assessee for making investment in shares or for earning dividend income. At best, if any disallowance could be made that can be restricted to ₹ 1,485/- which were claimed as demat charges. Disallowance u/s 14A r.w. Rule 8D cannot exceed the exempt income. In view of this fact, we find merit in the claim of the assessee. - Decided in favour of assessee. - ITA No. 5592/MUM/2012 - - - Dated:- 1-1-2015 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER For the Appellant: Dr. K.Shivaram Shri Rahul Hakani For the Respondent: Shri Akhilendra Yadav O R D E R P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an automatic fashion and hence, no satisfaction was recorded by A.O. as required u/s 14A before invoking Rule 8D. 5. The learned CIT(A) failed to appreciate that disallowance u/s 14A read with Rule 8D cannot exceed exempt income. 6. Without prejudice to above, dividend received during this year is only ₹ 1,82,262/- and demat charges are ₹ 1,485/-, hence the disallowance may be restricted to maximum ₹ 1,485/-. 2. At the time of hearing, Dr. K.Shivaram alongwith Shri Rahul Hakani, ld. counsels for the assessee advanced their arguments which are identical to the ground raised by submitting that no expenditure directly or indirectly was incurred by the assessee for earning exempt income and further the investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that no borrowed funds were utilized for earning the exempt income by the assessee and further the dividend were directly credited in the bank account of the assessee and no expenditure was claimed. What it may be, we find that the assessee only received ₹ 1,82,362/- as dividend income, therefore, there is no question of disallowance of ₹ 14,58.412/- by invoking section 14A r.w. Rule 8D under the facts available on record. It was also explained by the ld. counsel for the assessee that on identical fact in earlier years, no disallowance was made. In the present assessment year also, no borrowed funds were invested by the assessee for making investment in shares or for earning dividend income. At best, if any disallowance could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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