2019 (6) TMI 88

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....de under section 14A r/w rule 8D, while computing the income under the normal provisions as well as under section 115JB of the Income-tax Act, 1961 (for short "the Act"). 3. Brief facts are, the assessee company is engaged in the business of providing internet data service. In the course of assessment proceedings, the Assessing Officer noticed that during the year assessee had earned exempt income by way of dividend amounting to Rs..2,53,140. However, he noticed that the assessee had not disallowed any expenditure under section 14A r/w rule 8D for earning the exempt income. Accordingly, he called upon the assessee to explain why disallowance under section 14A r/w rule 8D should not be made. Though, the assessee objected to the propose....

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....A of the Act has to be made as per rule 8D(2). Further, he submitted, as per the decision of the Tribunal, Mumbai Bench, in DCIT v/s Viraj Profiles Ltd., [2016] 156 ITD 72 (Mum.), disallowance of expenditure for earning exempt income has to be made as per Explanation-1(f) of section 115JB(2). 6. The learned Authorised Representative strongly relying upon the observations of the first appellate authority submitted, disallowance under section 14A r/w rule 8D cannot exceed the exempt income earned during the year. In support of such contention, he relied upon the following decisions:- i) Cheminvest v/s CIT, [2015] 378 IT 33; ii) Joint Investments Pvt. Ltd. v/s CIT, [2015] 372 ITR 694; iii) PCIT v/s Caraf Builders ....