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Before: SH. AAKASH DEEP JAIN & SH. N. K. BILLAIYA
This appeal by the assessee is preferred against the order of the CIT(A)-1, New Delhi dated 01.02.2018 pertaining to A.Y. 2014-15.
The solitary grievance of the assessee is that the CIT(A) erred in confirming the action of the AO in making addition of Rs.2431909/- on account of disallowance u/s.14A r.w.r 8D of the Act though the same should have been restricted to total exempt income earned by the assessee.
Briefly stated the facts of the case are that during the year under consideration the assessee has earned dividend income of Rs.1791459/- on share investment. Invoking the provisions of section 14A r.w.r. 8D the AO made the disallowance of Rs.2431909/-.
Assessee carried the matter before the CIT(A) but without any success.
Before us the counsel stated that the disallowance u/s.14A should not exceed the exempt income.
6. We are of the considered view that this issue has now been well settled in favour of the assessee by the decision of the Hon’ble Delhi High Court in the case of Caraf Builders and Constructions Pvt. Ltd. 414 ITR 122.
Respectfully following the decision of the Hon’ble Jurisdictional High Court (supra). We direct the AO to restrict the disallowance to the extent of the exempt income of Rs.1791459/-. The appeal filed by the assessee is accordingly dismissed.
Decision announced in the open court in the presence of both the representatives on 09.12.2021.