TMI Blog2018 (6) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... , similar issue was considered in assessee s own case by the Coordinate Bench in the AY. 2011-12, wherein the Tribunal has confirmed the order of CIT(A), in restricting the disallowance to the amount claimed as exempt, following the principles laid down by the various Hon'ble High Courts. We modify the order of CIT(A) and direct the AO to restrict the disallowance to the amount of dividend earned and claimed as exemption. - Appeal of assessee is partly allowed. - I.T.A. No. 283/HYD/2017 Assessment Year: 2012-13 - - - Dated:- 15-6-2018 - Shri B. Ramakotaiah And Shri V. Durga Rao, JJ. For Assessee: Shri P. Murali Mohan Rao, AR For Revenue: Shri K.J. Rao, DR ORDER B. Ramakotaiah, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, dt. 25-05-2018. 4. Ld.DR, however, relied on the orders of the AO and CIT(A). 5. We have considered the rival contentions. As seen from the order in AY. 2011-12, Ld.CIT(A) has given relief, whereas in the impugned order, Ld.CIT(A) confirmed the disallowance. Facts being similar and assessee having earned very meagre amount of dividend, the disallowance of such high amount is not warranted. Moreover, AO also has not established that assessee has diverted the borrowed funds for the purpose of investments and unnecessarily invoked Rule 8D(2), which only applies to certain interest payments where the use of funds could not be established for the purpose of business. If there is any diversion of funds borrowed for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd reported in (2017) 81 Taxmann.com 108 (P H H.C) dated 12th January, 2016. 4. Having regard to the rival contentions and the material on record, we find that this issue is covered in favour of the assessee by the decision of the Hon'ble Delhi High Court (Supra), wherein it has been clearly held that the disallowance u/s 14A cannot exceed the exempt income earned by the assessee. In similar cases, the Coordinate Benches of this Tribunal have been following the decisions of various High Courts to the effect that when there is no exempt income, there cannot be any disallowance u/s. 14A of the Act and further that the disallowance u/s. 14A cannot exceed the exempt income earned by the assessee. Therefore, we see no reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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