ITA No. 346/Coch/2024

Parties Involved

Facts Summary

Vam Group Hi-Tech Engineering Pvt. Ltd. filed an appeal against the order of the CIT(A)-5, Mumbai dated 21.02.2024 for Assessment Year (AY) 2012-13. The assessee claimed dividend income of Rs. 9,600/- as exempted under section 10(34) of the Act. The Assessing Officer (AO) found that the assessee had not made disallowance of the expenses corresponding to the said dividend income. Accordingly, the AO invoked the provisions of section 14A r.w. rule 8D of Income Tax Rule and made disallowance of Rs. 2,87,740/- which was added to the total income of the assessee. On appeal, the learned CIT(A) confirmed the order of the AO. The assessee argued that the disallowance cannot exceed the amount of exempted income claimed in the return of income.…

Legal Issues

• 1. Whether the disallowance under section 14A of the Act read with rule 8D of IT Rule can exceed the amount of exempted income claimed by the assessee?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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