TMI Blog2023 (12) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... MADRAS HIGH COURT ] disallowance u/s 14A of the 1.T.Act cannot exceed the exempt income earned during the relevant assessment year irrespective whether larger amount was disallowed by the assessee u/s. 14 A of the IT Act while filing the return of income - we direct the AO to delete the disallowance and restrict the same to Rs. 1615/- only. Appeal of the assessee is partly allowed. - Sh. Saktijit Dey, Vice President And Sh. N. K. Billaiya, Accountant Member For the Appellant : Sh. Satyajeet Goel, Advocate For the Respondent : Sh. Kanv Bali, Sr. DR ORDER PER N. K. BILLAIYA, AM: This appeal by the assessee is preferred against the dated 29.07.2021 by NFAC, Delhi pertaining to A.Y. 2017-18. 2. The solitary gri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et the assessee suo-moto disallowed Rs. 565962/-, therefore, further disallowance by the AO is unwarranted. It is the say of the Counsel that even the suo-moto disallowance need to be deleted. Strong reliance was placed on the decision of the coordinate Bench in IT(TP)A No.2310/Bang/2019 order dated 28.10.2021. 9. Per contra the DR strongly supported the findings of the AO. It is the say of the DR that the AO has followed the provisions of section 14A r.w.r. 8D read with the relevant circular of the CBDT hence action of the AO cannot be faulted with. 10. We have carefully considered the orders of the authorities below. The undisputed fact is that the exempt income of the assessee is Rs. 1615/- only, therefore, in the light of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the Hon'ble Madras High Court reads as follow:- 20. Before parting, we may also note with reference to the Table of disallowance voluntarily made by the Assessee, which is part of the Paper Book before us for the four assessment years in question. In the Table quoted in the beginning of the order, shows that the Assessee himself computed and offered the disallowance beyond the exempted income in the particular year, namely AY 2009-10, as against the dividend income of Rs. 41,042/- and the Assessee himself computed disallowance under Rule 8D of the Rules to the extent of Rs. 2,38,575/-, which was increased to Rs. 98,16,104/- by the Assessing Authority. Similarly, for AY 2012-13, against Nil dividend income, the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent appeal by answering question of law in favour of the Assessee and against the Revenue and by holding that the disallowance under Rule 8D of the IT Rules read with Section 14A of the Act can never exceed the exempted income earned by the Assesee during the particular assessment year and further, without recording the satisfaction by the Assessing Authority that the apportionment of such disallowable expenditure made by the Assessee with respect to the exempted income is not acceptable for reasons to be assigned the Assessing Authority, he cannot resort to the computation method under Rule 8D of the Income Tax Rules, 1962. 3.7 In view of the above judgment of the Hon'ble Madras High Court in the case of M/s. Marg Limited v. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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