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Income Tax Appellate Tribunal, KOLKATA BENCH (D
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi, JM]
Per P.M. Jagtap, Vice President
This appeal filed by the assessee is directed against the order of Ld. CIT(A) - 13 Kolkata dated 07.06.2018 and the solitary issue involved therein relates to the disallowance of Rs. 8,24,022/- made by the AO and confirmed by the Ld. CIT(A) u/s 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962 .
The assessee in the present is an individual who filed his return of income for the year under consideration on 24.11.2014 declaring a total income of Rs. 4,77,520/-. In the said return, the dividend income of Rs. 17,808/- received during the year under consideration was claimed to be exempt by the assessee. Since the expenditure incurred
Assessment Year: 2014-15 Nirmal Kumar Nahata in relation to the earning of the said exempt income was not disallowed by the assessee as required by the provision of section 14A, the AO worked out such expenditure at Rs. 8,24,022/- by applying Rule 8D and made a disallowance to that extent in the assessment completed u/s 143(3) vide an order dated 05.12.2016. On appeal, the Ld. CIT(A) confirmed the said disallowance. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both the sides and also perused the relevant material available on record. The limited contention raised by the learned counsel for the assessee is that the disallowance u/s 14A cannot exceed the exempt income actually earned by the assessee and since the exempt dividend income in the form of dividend actually earned by the assessee during the year under consideration was only to the extent of Rs. 17,808/-, the disallowance made in the case of the assessee u/s 14A read with Rule 8D is liable to be restricted to Rs. 17,808/-. Since this contention raised by the learned counsel for the assessee is duly supported by the decision of Coordinate Bench of this Tribunal at Mumbai in the case of Pest Control India Pvt. Ltd. vs DCIT (ITA No. 5048/Mum/2016 dated 31.10.2017), we accept the same and restrict the disallowance of Rs. 8,24,022/- made by the AO and confirmed by the Ld. CIT(A) u/s 14A read with Rule 8D to Rs. 17,808/- being the amount of actual exempt income earned by the assessee during the year under consideration in the form of dividend.
Assessment Year: 2014-15 Nirmal Kumar Nahata
In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 19th December, 2018.