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TMI Blog2019 (7) TMI 1824X X X X Extracts X X X X X X X X Extracts X X X X ..... as no disallowance was done on the issue on which reopening was made. Accordingly, I set aside the order of learned CIT(A) and delete the disallowance. Computation of deduction u/s 14A - HELD THAT:- Hon'ble Apex Court in the case of Maxopp Investment [ 2018 (3) TMI 805 - SUPREME COURT ] has upheld Hon'ble Punjab Haryana High Court decision in the case of PCIT vs. State Bank of Patiala [ 2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT ] wherein restriction of disallowance u/s. 14A to the extent of exempt income earned has been upheld. Hence, it is now settled that no disallowance can be done over and above exempt income earned. Now in this case, it is the submission of learned Counsel of the assessee that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to consider that the dividend received subject to tax was a sum of ₹ 39,735/- not treated as tax exempt. The learned CIT(A) erred in confirming disallowance under Rule 8D (iii) On investments and stock in trade if only investment was considered, then the disallowance would not exceed a sum of ₹ 1,125/- 4. Brief facts of the case are that the assessee is engaged in the business of NBFC activities, which includes share trading and investment and funds lending. Present appeal relates to reopening of assessment u/s. 147 of the Act. Reopening of the case was done on the reasoning that the assessee has taken loan of ₹ 102.02 crores and the same was actually an accommodation entry. However, in course of assessment purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Jet Airways (supra), the action of the Assessing Officer of making the disallowance u/s. 14A is found to be not as per law. 6. Despite holding so learned CIT(A) proceeded to partly upholding the disallowance u/s. 14A of the Act. 7. Against this order, the assessee is in appeal before the ITAT. I have heard both the counsel and perused the records. 8. Learned Counsel of the assessee submitted that learned CIT(A) has clearly held that no disallowance u/s. 14A as permissible when the issue on which reopening was done was not a subject matter of any disallowance in the reassessment order. Learned counsel submitted that having so held learned CIT(A) has erred in partly upholding disallowance u/s. 14A. Learned counsel submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has only earned dividend income of ₹ 14,077/-. Learned counsel submitted that the disallowance u/s. 14A cannot exceed exempt income earned. Furthermore, learned counsel pleaded that in this case even the dividend income so earned ₹ 14,077/- has been offered to tax. Hence, learned counsel pleaded that no disallowance u/s. 14A is required in this case. 13. Upon hearing both the counsel and perusing the records, I find that Hon'ble Apex Court in the case of Maxopp Investment (402 ITR 640) has upheld Hon'ble Punjab Haryana High Court decision in the case of PCIT vs. State Bank of Patiala [2017] 391 ITR 218, wherein restriction of disallowance u/s. 14A to the extent of exempt income earned has been upheld. Hence, it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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