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TMI Blog2023 (6) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of disallowance of Rs.9,60,000/- u/s.14A of the Act as against the exempt income of Rs.7,29,565/- which is out of the dividend income earned by the assessee. 3. The brief facts are that the assessee is a private limited company engaged in the business of investments in shares and immovable properties, finance activities and trading in shares and securities including derivatives. The assessee company had filed its return of income date and 30.09.2013 declaring loss of Rs.3,38,04,124/- and the return of income was subsequently revised on 31.03.2015 claiming loss on inventory valuation and declared total loss of Rs.4,90,00,948/-. In the return of income, the assessee had voluntarily disallowed Rs.9,60,000/- u/s. 14A of the Act. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that disallowance u/s.14A cannot exceed the exempt income earned by the assesse for that year. The ld. CIT(A) also relied on various other decisions for the said proposition. 5. The assessee is in appeal before us challenging the order of the ld. CIT(A) in restricting the disallowance to Rs.9,60,000/- u/s.14A of the Act on the ground that the same shall not exceed the exempt income earned by the assessee for that year. 6. The ld. Authorised Representative (ld. AR for short) for the assessee contended that the assessee has earned exempt income of Rs.7,29,565/- during the impugned year and had suo moto made a disallowance of Rs.9,60,000/- as per the provisions of section 14A of the Act. The ld.AR further stated that the ld.CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. This issue before us is no longer res integra as various courts including the Hon'ble Apex Court has held that disallowance u/s.14A read with rule 8D should not exceed the exempt income earned by the assessee. We would like to place reliance on the decision of the Tribunal in the case of Chalet Hotels Ltd. Vs. DCIT, CC-4(2) (in ITA No. 3747/Mum/2019 vide order dated 11.01.2021 for A.Y. 2015-16), wherein on similar facts where the assessee had made suo moto disallowance more than that of the exempt income earned for that year, it was held that the disallowance should be only to the extent of the exempt income earned and not more than that. In light of the said positions, we are of the considered view that disallowances u/s.14A re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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