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2021 (11) TMI 740 - ITAT DELHIDisallowance u/s 14A r.w.Rule 8D - Amount assessee had earned a dividend income - HELD THAT:- Hon’ble Delhi High Court in the case of Joint Investment P.Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] held that “by no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure; incurred by the assessee in relation to the tax exempt income. This proportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case.” Respectfully following the ratio laid down by the Hon’ble Delhi High Court, we direct the Assessing Officer to restrict the disallowance to the extent of exempt income on dividend income earned by assessee as u/s 14A r.w.Rule 8D of Rules. Thus, grounds raised by the assessee in this appeal are partly allowed.
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