The Tax Publishers2020 TaxPub(DT) 2843 (Del-Trib) : (2020) 185 ITD 0765 : (2020) 083 ITR (Trib) 0466

INCOME TAX ACT, 1961

Section 14A

Disallowance under section 14A read with rule 8D could not exceed tax free income earned by assessee.

Disallowance under section 14A - Expenditure against exempt income - Disallowance exceeding tax free income -

Assessee earned tax free dividend income amounting to Rs. 180 lakhs. AO following the provisions of section 14A read with rule 8D(2) disallowed Rs. 4 lakhs and made the addition accordingly.Held: Disallowance under section 14A cannot be more than to that of the exempt income. Since in the instant case dividend income earned by assessee was of Rs. 1,80 lakhs which was claimed exempt under section 10(34), therefore, disallowance under section 14A read with rule 8D could not exceed the exempt income.

Followed:Joint Investment (P) Ltd. (2015) 372 ITR 694 (Del.) : 2015 TaxPub(DT) 1375 (Del-HC).

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2015-2016

INCOME TAX ACT, 1961

Section 28

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