TMI Blog2015 (10) TMI 2787X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D be interpreted so as to mean that the entire tax-exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure incurred by the assessee in relation to the tax-exempt income . This proportion or portion of the tax-exempt income surely cannot swallow the entire amount as has happened in this case. Respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO noticed that assessee had earned dividend income of ₹ 28,55,485/-. After considering the assessee s submissions in regard to disallowance to be made u/s 14A, the AO computed the disallowance at ₹ 1,73,65,881/- and, accordingly reduced the total loss at ₹ 9,27,055/-. 3. Ld. CIT(A) dismissed the assessee s appeal. Being aggrieved, the assessee is in appeal before us and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's contention that the amount of disallowance u/s 14A cannot exceed the amount of dividend income earned during the year under assessment. 4. At the time of hearing, ld. counsel did not press ground nos. 1 2. Accordingly, the same are dismissed as not pressed. 5. Apropos ground no. 3, ld. counsel for the assessee submitted that in view of the decision of Hon ble Delhi High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, an aspect which is completely unnoticed by the CIT(A) and the ITAT. The third, and in the opinion of this court, important anomaly which we cannot be unmindful is that whereas the entire tax-exempt income is ₹ 48,90,000/-, the disallowance ultimately directed works out to nearly 110% of that sum i.e. ₹ 52,56,197/-. By no stretch of imagination can Section 14A or Rule 8D be interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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