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TMI Blog2020 (10) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... ome earned during the relevant assessment years. Accordingly, we restrict the disallowance for assessment years 2010-2011 and 2013-2014 to the exempt income earned for the assessment years. Appeals filed by the assessee are partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income. Secondly, it was contended before the first appellate authority that disallowance u/s 14A of the I.T.Act cannot exceed the amount of exempt income earned by the assessee for the relevant assessment years. In this context, the assessee relied on the judgment of the Hon'ble Delhi High Court in the case of Joint Investments Pvt. Ltd. reported in 372 ITR 694 (Del.). The contentions of the assessee that disallowance u/s 14A of the I.T.Act is to be restricted to exempt income earned was noted by the CIT(A) in the impugned appellate orders. 7.1 The learned AR submitted that the assessee was in receipt of exempt income of RS.43,969 and Rs.91,507 for the assessment years 2010-2011 and 2013-2014, respectively. In support of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt income. Before us, the Ld. A.R. submitted that the quantum of disallowance u/s 14A of the Act should not exceed the amount of exempt income. In support of this proposition, the Ld. A.R. placed reliance on the decision rendered by Hon'ble High Court of Delhi in the case of Joint Investment Private Limited Vs. CIT 372 ITR 694 and also the decision rendered by Mumbai bench of Tribunal in the case of Future Corporate Resources Limited Vs. DCIT (ITA No.4658/Mum/2015 dated 26.7.2017). 11. The Hon'ble Delhi High Court has considered an identical issue in the case of PCIT vs. Caraf Builders & Construction (P) Ltd (2019)(101 taxmann.com 167) and has held as under:- "25. Total exempt income earned by the respondent-assessee in this year was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can be no dis allowance under section 14A in the absence of exempt income. The rationale behind these judgments is that the amount of dis allowance cannot exceed exempt income. In this case, on perusal of the facts, we find that the assessee has earned exempt income of Rs. 24,138, whereas the assessing officer disallowed an amount of Rs. 3,36,28,000. Therefore, considering the facts and circumstances of the case and also following the ratios of the case laws discussed above, we are of the view that disallowance under section 14A cannot exceed the exempt income. Hence, we direct the assessing officer to restrict disallowance under section 14A to the extent of exempt income earned by the assessee." The above said decisions would support t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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