TMI Blog2019 (3) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... opp Investment Ltd. Vs. CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA], Cheminvest Vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] and other decisions has held that disallowance u/s 14A cannot exceed exempt income of the relevant year. In the present case, since assessee has earned exempt income from dividends only to the extent of ₹ 3,705/-, we relying on the aforesaid decisions direct the disallowance u/s 14A of the Act be restricted to the extent of exempt income i.e., ₹ 3,705/-. - Decided partly in favour of assessee. - ITA No.1328/PUN/2018 - - - Dated:- 7-3-2019 - Shri Anil Chaturvedi, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Gopal R. Aswani. For the Revenue : Shri M.K. Verma. ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the circumstances of the case and in l aw the honorable CIT (Appea l s ) - 7, Pune erred in confirming the disallowance of interest and other expenses amounting to Rs . 12,49,564/- made under sect i on 14A of the I. T. Act read with Rule 80 of the I. T . Rules , 1962 without appreciating the facts that a) The appellant has not made any new investment during the year under cons i dera ti o n, income from which is exempt from tax . b) The appellant has not incurred any expenditure i n relation to the income not form i n g part of total income in order to attract the provisions of section 14A of the I .T. Act c) The interest free funds available with the appellant in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper Book submitted that as against the investment of ₹ 86 lakhs assessee was having sufficient interest free funds in the form of Share capital and Reserves and Surplus aggregating to ₹ 23 crores which were more than the investments and in such a situation, it is to be presumed that investments are out of interest free funds. Ld.A.R. relied on the decision of Hon ble Bombay High Court in the case of CIT Vs. HDFC Bank Ltd., reported in (2014) 366 ITR 505 wherein it was held that when the own funds are more than the investments then no disallowance of interest u/s 14A of the Act is called for. Relying on the aforesaid decision, he submitted that no disallowance of interest under Rule 8D(2)(ii) of I.T. Rules is called for in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end only of ₹ 3,705/-. The aforesaid contention of the assessee has not been controverted by Revenue. We find that the Hon ble Punjab and Haryana High Court in the case of PCIT Vs. State Bank of Patiala in ITA No.359 of 2017 dt.14.11.2017 has held that the amount of disallowance u/s 14A of the Act has to be restricted to the amount of exempt income only and not at a higher figure. We find that against the aforesaid order of Punjab and Haryana High Court, Revenue filed S.L.P. before the Hon ble Apex Court and the S.L.P. was dismissed by the Hon ble Apex Court. We further find that Hon ble Delhi High Court in the case of PCIT Vs Caraf Builders Construction (P) Ltd., (2019) 101 Taxmann.com 167 (Del) after considering the decisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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