TaxTMI 
TaxTMI 
2021 (1) TMI 47
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....es. 1.1. Disallowances of Rs. 1,17,42,802/-under rule 8D{2){ii) of the IT rules and Rs. 12,23,566/- under rules 8D(1J(iii) of the IT rules totaling to Rs. 129,66,368/- under section 14A of the IT Act are under dispute. 1.2.The Assessing Officer made elaborate discussions which are against the facts of the appellant's case. 1.3.The Assessing Officer took various grounds which are not relevant to the facts of the appellant's case arid are also not in accordance with the Act and rules. 1,4.The Commissioner of Income tax (Appeals) confirmed the disallowances made by the Assessing Officer by referring to various case laws which are not applicable to the facts of the appellant's case. 1,5.The investments Rs. 29,02,50,507/- re....
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.....4 The Commissioner of Income tax (Appeals) confirmed the addition by referring to case law which Is not applicable to the facts of the appellants case." 3. Brief facts of the case are that the assessee company is engaged in the business of manufacturing of textiles, hand loom and power loom filed its return of income for the assessment year 2014-15 on 28.10.2014 declaring total income of Rs. 28,36,52,150/-. The case was selected for scrutiny and assessment has been completed u/s.143(3) read with section 92CA(3) of the Act, after making addition of Rs. 1,29,66,368/- towards expenditure in relation to exempt income u/s.14A read with Rule 8D of I.T.Rules, 1962. The Assessing Officer has made similar additions towards book profit....
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....d u/s.14A read with Rule 8D shall not swallow entire income earned for the year. In other words, disallowance of expenditure u/s.14A read with Rule 8D shall not exceed exempt income earned for the year. This principle is supported by the decision of Hon'ble Delhi High Court in the case of Cheminvest Ltd. vs.CIT (2015) 378 ITR 33, where it was clearly held that disallowance of expenditure u/s 14A shall not exceed exempt income earned for the year . A similar view has been taken by the Chennai Bench of the Tribunal in the case of M/s.Voltech Engineers Pvt. Ltd Vs. DCIT (2017) 163 ITD 469. In this case, although the dividend income earned for the year is at Rs. 24,611/-, the Assessing Officer has computed disallowance of Rs. 1,29,66,368/....