MAHESWARI PLAZA RESORTS LIMITED,HYDERABAD vs. INCOME TAX OFFICER, WARD-16(3), HYDERABAD

Next comes section 14A r.w. Rule 8D disallowance of Rs.6,28,033 and Rs.1,03,061 assessment year-wise respectively. There is no dispute about the clinching fact that the assessee had indeed derived its corresponding exempt income in both these assessment years. We further note that the hon'ble Delhi high court’s decision in Joint Investment Pvt Ltd vs. CIT 372 ITR 694 (Del.) holds that the impugned section 14A r.w. Rule 8D disallowance does not exceed the amount of exempt income itself. We therefore partly decline Revenue’s arguments supporting the same to this limited extent. The Assessing Officer is directed to finalise his consequential computation in both these assessment years and shall make sure that the disallowance sum shall not exceed the assessee’s corresponding exempt income; as the case may be. (No other ground has been pressed before us). These two assessee’s appeals are partly allowed in above terms. A copy of the order may be placed in both the files.