TMI Blog2015 (11) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... me during the relevant financial period. In the present case, since the total exempt income of the assessee is ₹ 13,35,040 and the assessee had suo moto offered disallowance of ₹ 1,81,388 under Rule 8D(2)(iii) of the Income Tax Rules, 1962 being 0.5% of the average value of the investment in the shares of Apollo Tyres Ltd. on which such dividend income was earned. Hence, we direct the Assessing Officer that the disallowance u/s 14A be restricted to ₹ 11,53,752 (Rs. 13,35,040 – ₹ 1,81,388) and the remaining amount of disallowance is directed to be deleted. - Decided partly in favour of assessee. - I.T.A. No. 6586/Del/2013 - - - Dated:- 27-11-2015 - Chandra Mohan Garg (Judicial Member) And O. P. Kant (Accountant Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceed the exempt income and therefore, the disallowance was restricted to the exempt income. Learned counsel of the assessee has drawn our attention towards para 4 of the Tribunal order (supra). 4. Learned Departmental Representative strongly supported the orders of the authorities below, however, he fairly accepted that in the similar set of facts and circumstances, the amount of disallowance has been restricted to the exempt income. 5. Firstly, it would be appropriate to reproduce the relevant part of the order of the Tribunal (supra) which has been relied by the learned counsel of the assessee which reads as follows:- 4. We have heard the rival submissions and perused the relevant material on record. It is observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. (supra) held that there can be no disallowance u/s 14A in the absence of any exempt income. Finally, the ratio laid down by the Jurisdictional High Court noted that the disallowance should not exceed the exempt income during the relevant financial period. In the present case, since the total exempt income of the assessee is ₹ 13,35,040 and the assessee had suo moto offered disallowance of ₹ 1,81,388 under Rule 8D(2)(iii) of the Income Tax Rules, 1962 being 0.5% of the average value of the investment in the shares of Apollo Tyres Ltd. on which such dividend income was earned. Hence, we direct the Assessing Officer that the disallowance u/s 14A be restricted to ₹ 11,53,752 (Rs. 13,35,040 ₹ 1,81,388) and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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