Case Law Details
DCIT Vs DLF Universal Ltd. (ITAT Delhi)
Conclusion: Disallowance u/s 14A got restricted to the extent of exempt income, even if the provisions of the section 14A were attracted.
Held: Assessee was engaged in carrying out the business of real estate development. AO made addition/disallowance of Rs. 2,53,10,424/- u/s. 14A read with Rule 8D. Assessee company had itself offered for assessing a sum on account of direct expenses attributable to earning of tax free dividend income of Rs.4,30,621/-. It was held that in the case Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) if there was no exempt income, there could be no question of making any disallowance u/s 14A. Similar view had been taken in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. The net effect of these decisions was that the disallowance u/s 14A got restricted to the extent of exempt income, even if the provisions of the section were attracted. In view of the above precedents, which were squarely applicable to the facts of the instant case, the disallowance to the extent of exempt income of Rs.4,30,621/- was restricted.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal 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 :
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