TMI Blog2023 (4) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Development Board [ 2019 (3) TMI 1571 - SC ORDER ] and State Bank of India [ 2018 (11) TMI 1565 - SC ORDER ] that disallowance u/s 14A should be restricted to amount of exempt income of assessee only and not a higher income. Decided in favour of assessee. - ITA No.304/M/2023 - - - Dated:- 20-4-2023 - Shri Kuldip Singh, Judicial Member And Shri Gagan Goyal, Accountant Member For the Assessee : Shri Ravikant S. Pathak, A.R. For the Revenue : Shri Chetan M. Kacha, D.R. ORDER PER : KULDIP SINGH, JUDICIAL MEMBER: The appellant, Asstt. Commissioner of Income Tax 4(1)(1), Mumbai (hereinafter referred to as the Revenue ) by filing the present appeal, sought to set aside the impugned order dated 14.12.2022 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain loan transactions as non-genuine and thereby made total disallowance under section 14A read with rule 8D to the tune of Rs.3,23,76,712/- and thereby framed the assessment under section 143(3) of the Act. 3. The assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has deleted the addition by allowing the appeal. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the Revenue has come up before the Tribunal by way of filing present appeal. 4. We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the decision rendered by the Hon ble Bombay High Court and Hon'ble Apex Court referred to in the preceding paras and returned the following findings: 7.2 Finding on Ground of Appeal No. 2 a) The gist of disallowance made by AO u/s 14A rw Rule 8D is outlined in para 2b to 2d of this order. b) Appellant had made investments in shares had earned dividend income of Rs.7,29,565/- on shares which was claimed as Exempt u/s 10(34) of Act. Appellant itself had disallowed Rs.9,60,000/- u/s 14A r.w. Rule 8D in the return filed. Thus, the appellant has earned exempt income of Rs.7,29,565/- on such investments and has itself disallowed Rs.9,60,000/ u/s 14A r.w. Rule 8D. c) The AO has made disallowance of Rs.3,33,36,712/- u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exempt income earned. vii) Hon'ble Bombay High Court in the case of Reliance Ports and Terminals Ltd. (114 taxmann.com 529) [2020] It was held that - disallowance u/s 14A cannot be more than exempt income. viii) Hon'ble Madras High Court in the case of M/s. Marg Ltd. (120 taxmann.com 84) [2020]- It confirmed the order of Tribunal restricting the disallowance u/s 14A to extent to exempt income earned by assessee. ix) Hon'ble Punjab Haryana High Court in the case of M/s. Empire package pvt. Ltd. (81 taxmannn.com 108)[2017]- It confirmed the order of Tribunal restricting the disallowance u/s 14A to extent of exempt Income earned. x) Hon'ble Mumbai Tribunal in the case of Pest control India Pvt Ltd. (ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- (3,33,36,7129,60,000) is allowed to appellant. Ground of appeal No. 2 is allowed. 8. Undisputedly the assessee has earned dividend income of Rs.7,29,565/- on shares and claimed the same as exempt under section 10(34) of the Act. It is also not in dispute that the assessee has suo-moto disallowed an amount of Rs.9,60,000/- under section 14A read with Rule 8D. 9. In the backdrop of the aforesaid undisputed facts the core issue to be decided in this appeal is: As to whether the Ld. CIT(A) has rightly restricted the disallowance made by the AO under section 14A read with Rule 8D to Rs.9,60,000/- as against disallowance of Rs.3,33,36,712/- made by the AO, which is more than the dividend income earned by the assessee during the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
