ACIT, NEW DELHI vs. M/S. SUPER PLASTIC COATS PVT. LTD., NEW DELHI

The effective ground raised

1. On the facts and circumstances of the case, the Ld. CIT(A) erred in law and on the facts in restricting the disallowance of expense u/s 14A read with Rule 8D to the extent of Rs.43,073/- out of total addition of Rs.47,00,415/- made by the AO.”

It is not in dispute that the assessee earned dividend income of Rs.43,073/-. However, the Assessing Officer computed the expenditure by invoking the provisions of section 14A read with Rule 8D and accordingly completed the assessment.

On an appeal filed by the assessee, ld. CIT(A) followed the decision of the Jurisdictional High Court in the case of Joint Investments Pvt. Ltd. vs. CIT, 2015 (3) TMI 155, wherein the Hon’ble High Court also held that the disallowance should be restricted to the exempt dividend income earned by the assessee. Accordingly, a direction was given by the ld. CIT(A) to the Assessing Officer to restrict the disallowance to Rs.43,073/-. Aggrieved, The Revenue is in appeal before the Tribunal.

It is not in dispute that the issue is squarely covered by the Jurisdictional High Court and no other contrary decision of the Jurisdictional High Court has been placed before us. Under these circumstances, we hold that the order passed by the ld. CIT(A) does not call for any interference and the appeal of the Revenue is accordingly dismissed.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on this 17th day of November, 2017.