Disallowance under section 14A r.w. Rule 8D cannot exceed exempt income

Pr. CIT Vs Caraf Builders & Constructions Pvt. Ltd. (Delhi High Court) In the matter of Income Tax Appeal No. 1260/2018, the Delhi High Court addressed the disallowance under Section 14A of the Income Tax Act, 1961, in relation to the Assessment Year 2009-10 concerning M/s. Caraf Builders & Construction Pvt. Ltd. (referred to as the ‘respondent-assessee’). Background: The primary contention in this appeal was related to the quantum of disallowance under Section 14A of the Act. The respondent-assessee had declared income of Rs. 6,30,950/- as short-term capital gains from th...