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TMI Blog2021 (1) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... al has been preferred by the Revenue against the order dated 21.08.2017 of the ld. CIT(A) in appeal No. 13/16-17 A.Y. 2013-14, arising out of assessment order dated 08.03.2016. Revenue has taken following grounds of appeal : "1. Ld. CIT(A) has erred on fact and in law in restricting the disallowance to Rs. 4,30,621/- from Rs. 2,53,10,424/- made by the Assessing Officer under section 14A of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby making addition/disallowance of Rs. 2,53,10,424/- u/s. 14A read with Rule 8D. The assessee company has itself offered for assessing a sum of Rs. 6,37,302/- on account of direct expenses attributable to earning of tax free dividend income of Rs. 4,30,621/-. 3. Thereafter, assessee preferred first statutory appeal before the ld. CIT(A) who allowed the appeal of the assessee holding that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench with the following observations : "4. We have heard both the sides and perused the relevant material on record. It is an admitted position that the assessee earned exempt dividend income of Rs. 4,30,621/- as has been recorded on page 2 of the assessment order. The Hon'ble jurisdictional High Court in Principal CIT vs. Empire Package Pvt. Ltd. (2016) 286 CTR 457 (P&H), considered the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. The net effect of these decisions is that the disallowance u/s 14A gets restricted to the extent of exempt income, even if the provisions of the section are attracted. In view of the above precedents, which are squarely applicable to the facts of the instant case, we limit the disallowance to the extent of exempt income of Rs. 4,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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