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Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
The aforesaid appeal has been filed by the Revenue against impugned order dated 19/9/2014, passed by the ld. CIT (Appeals)-XII, New Delhi for the quantum of assessment passed u/s. 143(3) of the Income Tax Act, 1961 for assessment year 2010-11. The sole ground raised by the Revenue in the grounds of appeal is as under:-
The ld. CIT(A) erred in law and on the facts in deleting this allowances of Rs.52,16,685/- made by the Assessing Officer under section 14A r/w Rule 8D of the I.T. Rules.
None appeared on behalf of the assessee despite service of notice, therefore, we are proceeding to decide the matter on merits after hearing the ld. D.R.
The sole issue raised in this appeal by the Revenue relates to the disallowance under section 14A read with Rule 8D of Rs.52,16,685/-.
At the outset, it is noticed that dividend income which has been claimed as exempt is only Rs.11,444/- and as against this, disallowance under section 14A has been made at Rs.52,16,685/- which constitute disallowance of interest under Rule 8D(2)(ii) of Rs.48,57,136/- and indirect expenditure of Rs.3,59,549/- under Rule 8D(2)(iii).
The ld. CIT(A), has directed the Assessing Officer to re- work the disallowance under section 14A keeping in view the judgment of Hon'ble Delhi High Court in the case of Maxopp Investment Ltd. Vs. CIT reported in [2011] 64 DTR (Del) 122.
Since exempt income is only Rs.11,444/-, therefore, in view of the judgment of the jurisdictional High Court in the case of Cheminvest Ltd. Vs. CIT reported in [2015] 378 ITR 33 (Del), we hold that disallowance cannot exceed the exempt income and accordingly, disallowance is restricted to Rs.11,444/- and the balance is directed to be deleted.
In the result, appeal of the Revenue is partly allowed.
Order pronounced in the open Court on 24th October, 2017.