TMI Blog2017 (2) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier years, no disallowance was made. In the present assessment year also, no borrowed funds were invested by the assessee for making investment in shares or for earning dividend income.Disallowance u/s 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. - I.T.A. No. 6566/Mum/2013 - - - Dated:- 23-2-2017 - Shri D. T. Garasia, JM And Shri Rajesh Kumar, AM Assessee by : Shri Ashok J Patil Revenue by : Shri Suman Kumar ORDER Per Rajesh Kumar, Accountant Member The assessee has filed this appeal challenging the order dated 26.9.2013 passed by the ld.CIT(A)-12, Mumbai for the assessment year 2009-10 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... differing and not covered in favour of the assessee. 4. Heard both the parties and perused the material placed before us including the orders of authorities below and case law cited by the ld.AR. The undisputed fact is that during the year the assessee has earned dividend income of ₹ 20,000/-, whereas the AO has made disallowance of ₹ 4,22,992/- comprising ₹ 1,19,657/- under rule 8D(2)(ii) in respect of interest and ₹ 3,03,335/- under rule 8d(2)(iii) being 0.50% of the average investment after rejecting the submissions of the assessee which has been incorporated in para 4.2 of the assessment order. The assessee has earned an income of ₹ 20,000/- as dividend which is claimed as exempt under section 10(34) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee credited dividend income of ₹ 1,82,262/- in its profit and loss account. The Assessing Officer while framing the assessment invoke section 14A r.w. Rule 8D by contending that assessee claimed various expenses which are related to exempt income in its profit loss account and disallowed ₹ 14,58,412/-. On appeal, before the ld. Commissioner of Income tax (Appeals) broadly the stand taken in the assessment order was affirmed against which the assessee is in further appeal before this Tribunal. The totality of facts clearly indicates, as claimed by the assessee that no borrowed funds were utilized for earning the exempt income by the assessee and further the dividend were directly credited in the bank account of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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