2019 (5) TMI 1050

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....or the Revenue : Shri Choudhary Araunkumar Singh, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The above titled appeals one by the assessee and the other by the Revenue have been preferred against the order dated 04.10.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2014-15. ITA No.223/M/2018 (Assessee's appeal) ....

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....itted before the AO that no expenditure was incurred in relation to earning of the exempt income and submitted that if provisions of section 14A applied, only the disallowance would work out to Rs. 80,196/-. The AO brushing aside the contentions of the assessee applied the provisions of section 14A read with rule 8D working out the disallowance at Rs. 5,58,67,588/- comprising interest of Rs. 1,99,....

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....,572/- by following the decision of Chem Investment 67 Taxmann.com 118. 5. After hearing both the parties and perusing the material on record, we observe that the disallowance under section 14A read with rule 8D can not exceed the amount of exempt income as has been held by the Hon'ble Bombay High Court in the case of Pr. CIT vs. Ballarpur Industries in ITA No.51 of 2016 order dated 13.10.2016 ....

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....llowed. ITA No.162/M/2018 (Revenue's appeal) 7. The issue in the Revenue's appeal is against the order of Ld. CIT(A) deleting the disallowance of Rs. 1,99,23,763/- made under rule 8D2(ii) of the IT Rules on the ground that assessee's own interest free funds were more than the investment made. 8. We find that the Ld. CIT(A) has deleted the disallowance by following the decision in the case....