TaxTMI 
TaxTMI 
2023 (1) TMI 953
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....peal: "1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2.1 The ld.CIT(A) erred in directing the Assessing Officer to restrict the disallowance u/s 14A to the extent of dividend income declared relying on the decision of t(c) Hon'ble Madras High Court in the case of Mis. Redington India Limited Vs. Addi.CIT reported in 392 ITR 633 though the facts of the case in hand is different frorn the decision in the case of the Hon'ble Madras High Court. In the relied on the decision, the assessee has not declared any exempt income whereas the assessee has declared exempt income of Rs.13,754/- in the case in hand. 2.2 The learned CIT(A) ought to have considered the fact that in the relied on ....
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....e analysis, design and development, filed its return of income for the assessment year 2011-12 on 30.09.2011, admitting total income of Rs. 150,46,75,014/-. During the course of assessment proceedings, the AO noticed that the assessee has made huge investment in shares and securities and also earned dividend income of Rs. 13,754/- and same has been claimed as exemption u/s. 10(34) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). However, does not made suomoto disallowance of expenditure relatable to exempt income. Therefore, invoked provisions of Rule 8D of Income Tax Rules, 1962 (hereinafter referred to as "the IT Rules, 1962") and computed disallowance of Rs. 4,33,97,965/-. The assessee carried the matter in appeal befo....
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....upra), where it has been held that in absence of exempt income for relevant assessment year, no disallowance could be made u/s. 14A of the Act towards expenditure relatable to exempt income. The Hon'ble Supreme Court had also considered an identical issue in the case of CIT vs M/s. Chettinad Logistics Pvt. Ltd. [2018] 95 Taxmann.com 250 (SC), and held that if no exempt income for relevant assessment year, then no disallowance could be made u/s. 14A of the Act. In other words, disallowance contemplated u/s. 14A of the Act cannot exceed exempt income earned in the relevant assessment year, and this ratio is supported by the decision of the Delhi High Court in the case of PCIT vs Era Infrastructure (India) Ltd in ITA No. 204/2022 & CM Appl. 31....