DCIT, CENTRALCIRCLE-1, NEW DELHI vs. BLUE COAST HOTELS LTD, NEW DELHI

This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals], New Delhi-23 dated 06.09.2022 pertaining to assessment year 2017-18.

The sum and substance of the grievance of the Revenue is that the ld. CIT(A) erred in restricting the disallowance u/s 14A r.w.r 8D of the Act to Rs. 99,693/- against disallowance of Rs. 2,31,39,000/- made by the Assessing Officer.

Briefly stated, the facts of the case are that during the scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has earned dividend from investments and invoking provisions of section 14A r.w.r 8D, the Assessing Officer computed the disallowance at Rs. 2,31,39,000/-.

Addition was challenged before the Id. CIT(A) and it was strongly contended that during the year under consideration, the assessee has earned dividend amounting to Rs. 99,693/- only.

Referring to various judicial decisions, the Id. CIT(A) was of the opinion that the disallowance u/s 14A r.w.r.r 8D cannot exceed the exempt income and, accordingly, directed the Assessing Officer to restrict the dividend to Rs. 99,693/-.

Before us, the ld. DR strongly supported the findings of the Assessing Officer.

Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities.

We have carefully perused the orders of the authorities below.

In the result, the appeal filed by the Revenue in is dismissed.