2023 (12) TMI 1229

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....62/-. 3. The appeal is late by 566 days the assessee has filed an application for condonation of delay supported by the affidavit of one Rajat Garg who was responsible for handling the income tax matter of the assessee. 4. We have given a thoughtful consideration to the reasons mentioned in the application for the condonation of the delay supported by the affidavit. We are of the considered opinion that the assessee was prevented by reasonable and sufficient cause for not filing the appeal within the period of limitation, therefore, in the interest of justice the delay is condoned. 5. Coming to the merits we find that during the year the assessee has earned dividend income of Rs. 1615/- which was claimed as exempt u/s. 10 of the Ac....

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....ordingly directed to restrict the disallowance of Rs. 1615/- only. 12. In so far the suo-moto disallowance of Rs. 565962/- is concerned the coordinate Bench in the case of GMR Enterprises Private Limited (supra) following the decision of the Hon'ble Madras High Court in the case of M/s. Marg Limited Vs. CIT in Tax Appeal Nos. 41 to 43 and 220 of 2017 held as under :- "3.6 However, in this case, the assessee had made disallowance of Rs. 145,02,09,668 voluntarily while filing the return of income. In this context, it is important to refer to the judgment of the Hon'ble Madras High Court in the case of M/s. Marg Limited v. CIT in Tax Case Appeal Nos.41 to 43 & 220 of 2017 (judgment dated 30.09.2020). The Hon'ble Madras High....

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....by the Assessee himself in the computation of disallowance under Rule 8D made by him. These facts are akin to the case of Pragati Krishna Gramin Bank(2018) 95 Taxman.com 41 (Kar.) decided by Karnataka High Court. The legal position, as Interpreted above by various judgments and again reiterated by us in this judgment. remains that the disallowance of expenditure incurred to earn exempted income cannot exceed exempted income itself and neither the Assessee nor the Revenue are entitled to take a deviated view of the matter. Because as already noted by us, the negative figure of disallowance cannot amount to hypothetical taxable income in the hands of the Assessee. The disallowance of expenditure incurred to earn exempted income has to be a sm....