2017 (2) TMI 1508

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....39;s contention that the disallowance under section 14A cannot exceed Rs. 15,22,277/- being 0.5% of the average value of the opening and closing balance of investment in shares of Apollo Tyres Ltd and PTL Enterprises Ltd on which such dividend income has been received by the assessee company, thereby confirming the addition of Rs. 1,82,95,666/- made by the assessing officer u/s 14A of the Income Tax Act, resulting in reduction to returned Loss to that extent. 3. Without to the prejudice to appellant contention that rule 8D is not applicable, the learned Commissioner of Income Tax (Appeals) erred in holding that disallowance under Rule 8D has been correctly worked out in accordance with the provisions of Rule 8D of the Income Tax Rules, 19....

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....owance made by the AO is more than the exempted income claimed by the assessee. On a similar issue the ITAT Delhi Bench 'D' in the aforesaid referred to case of M/s Global Capital Ltd., New Delhi Vs ACIT, Circle-12(1), New Delhi (supra) by following the earlier decision dated 29.04.2015 of the ITAT 'C' Bench, New Delhi in the case of Indus Valley Investment & Finance (P) Ltd. Vs DCIT in ITA No. 3763/Del/2013 for the assessment year 2009-10, observed as under: "3. We have heard the rival submissions and carefully perused the relevant material placed on record. At the very outset, learned counsel of the assessee submitted a copy of the order of the ITAT Delhi 'C' Bench in I.T.A. No.3763/Del/2013 for assessment year 2009-10 dated 29.4.15 in ....

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.... income. The rationale behind these judgments is that the amount of disallowance u/s 14A should not exceed the exempt income. Since the total exempt income in the instant case is Rs. 25,38,020/-, we direct that the disallowance u/s 14A be restricted to Rs. 18,01,968/- (Rs. 25,38,020- Rs. 7,36,052/-). The remaining amount of disallowance is directed to be deleted." 6. In view of above, it is observed that in the similar set of facts and circumstances, the total exempt income earned by the present assessee is Rs. 13,35,040 against which an addition of Rs. 21,87,713 has been made by the Assessing Officer u/s 14A of the Act. As noted by the Coordinate Bench of this Tribunal that in the case of Joint Investment (P) Ltd. vs CIT (supra), the Hon....