2023 (2) TMI 956

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed that though the appeals of the assessee are for 2 different assessment years but the issues involved in both the appeals are identical and he has common submissions to make. The aforesaid contentions of Ld. AR has not been controverted by Ld. DR. In such a situation since common issues are involved in both the appeals, the appeals were heard together and are being disposed of by this common consolidated order for the sake of brevity. We, however refer to the relevant facts from ITA.No.3608/Del./2018 for the A.Y. 2014-15 which are as under : 2.1. The assessee is a company stated to be engaged in the business of Consultancy, Service Fee, Corporate Insurance Agency and Sale of Windmill Energy etc. Assessee filed its return of income for ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 2,14,06,782/-. The assessee was asked to furnish the justification and calculation of disallowance u/s. 14A r.w.r. 8D Income Tax of the Rules and also asked to show cause as to why the disallowance so worked out be not added to the total income of the assessee. In response to the query of the AO, assessee made detailed submissions which are reproduced by the AO from pages 2 to 15 of the order. The submissions of the assessee was not found acceptable to AO. AO for the reasons stated in the order worked out the disallowance u/s. 14A r.w.r 8D of the Act, at Rs. 1,77,99,957/- and disallowed the same. 5. Aggrieved by the order of AO, assessee carried the matter before the Ld. CIT(A) who vide order dated 28.02.2018 in appeal no. 651/16-17 up....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pt income of the relevant year. This position has also been upheld by various High Courts including Hon'ble Delhi High Court in various decisions. In view of the settled position of law that the disallowance u/s. 14A cannot exceed exempt income and in view of the fact that the disallowance made u/s. 14A r.w.r 8D is much in excess of the exempt income, we direct the AO to restrict the disallowance u/s. 14 r.w.r 8D to the extent of exempt income earned by the assessee. Before us, though the assessee has stated that it has earned exempt tax free dividend income of Rs. 8.81 lacs but we find that there is no finding by the lower authorities of the exempt income earned by the assessee. AO is therefore directed to work out the disallowance u/s. 14....