TMI Blog2016 (1) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of provisions of section 14A read with Rule 8D. However, the alternative claim of the assessee was that disallowance it at all should be made, it should be restricted to exempt income earned and not beyond that. Thus, we direct the Assessing Officer to restrict the disallowance to the exempt income. The alternative ground of appeal of the assessee is allowed. - Decided partly in favour of assessee in part. - M.P.No.106/Mds/2015 & I .T.A.No.57/Mds/2015 - - - Dated:- 28-10-2015 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For The Appellant : Mr. S.Sridhar and Mr. A.S.Sriraman, Advocates For The Respondent : Mr. A.V.Sreekanth, JCIT ORDER Per Challa Nagendra Prasad, JM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground since this Tribunal did not give any finding nor disposed off the alternative ground no.7 vide order dated 29.05.2015. 5. Since the above ground is not disposed off inadvertently, there is a mistake apparent on record in the order passed by this Tribunal. Thus, we recall the order in ITA No.57/Mds/2015 dated 29.05.2015 for the limited purpose of disposing off the alternative ground. The Miscellaneous Petition is allowed. 6. Coming to the merits of the alternative ground, counsel for the assessee submits that the Assessing Officer while completing the assessment disallowed ₹ 37,23,755/- under section 14A read with Rule 8D. Counsel submits that during this assessment year assessee received dividend income of ₹ 5,55, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 14A r.w. Rule 8D is to be made. 2.1. On the other hand, Shri Akhilendra Yadav strongly defended the conclusion arrived at by the ld.Commissioner of Income tax (Appeals) by contending that a well reasoned order has been passed by the ld. First Appellate Authority as apportionment of expenditure for earning the dividend income was done as per the provisions of the Act. It was pleaded that section 14A r.w. Rule 8D of the Rules is clearly applicable to the facts of the present appeal. 2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a limited company, engaged in trading of bulk and fine, chemicals, solvent and pharmaceutical raw materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A r.w. Rule 8D cannot exceed the exempt income. In view of this fact, we find merit in the claim of the assessee. The appeal of the assessee is therefore, allowed. 7. In the case of the assessee, the Assessing Officer disallowed ₹ 37,23,755/- under section 14A read with Rule 8D, whereas the actual dividend income received by the assessee and claimed as exempt income under section 10(34) was only ₹ 5,55,455/-. Following the decision of the Mumbai Bench cited above we are of the view that disallowance under section 14A read with Rule 8D should not exceed the exempt income claimed by the assessee. The Mumbai Bench in its order sustained the disallowance on applicability of provisions of section 14A read with Rule 8D. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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