MANU/ID/0008/2024

IN THE ITAT, NEW DELHI BENCH, NEW DELHI

ITA No. 140/Del/2020

Assessment Year: 2016-2017

Decided On: 03.01.2024

Appellants: LT Foods Ltd. Vs. Respondent: Addl. CIT, Special Range-5

Hon'ble Judges/Coram:
Kul Bharat, Member (J) and Dr. B.R.R. Kumar

ORDER

Dr. B.R.R. Kumar, Member (A)

1. The present appeal has been filed by the assessee against the order of ld. CIT( A)- 36, New Delhi dated 18.10.2019.

2. The only issue raised before us pertains to disallowance of expenses u/s 14 A of the Income Tax Act, 1961. During the year, the assessee received total amount of Rs.66,810/- in respect of which exemption was claimed u/s 10 of the Income Tax Act, 1961. The amount consists of Rs.51,228/- on account of share in profit in the partnership firm, an amount of Rs. 15,582/- on account of dividend income from mutual fund. The assessee has suo motu made disallowance of Rs. 8,44,669/- u/s 14A r.w.r. 8D. The Assessing Officer has increased the disallowance to Rs. 1,35,74,360/- which the ld. CIT(A) confirmed. Aggrieved, the assessee filed appeal before us. The facts are not in dispute. By this time, it is settled position that the disallowance u/s 14 A of the Act cannot exceed exempt income claimed. Since, in the instant case, the exempt income claimed by the assessee was Rs. 66,810/- and the disallowance already made were to the tune of Rs. 8,44,699/-, respectfully placing reliance on the judgment of Hon'ble High Court in the case of Joint Investment Pvt. Ltd. Vs. CIT (MANU/DE/1144/2015 : 2015:DHC:1804-DB : 372 ITR 694 ) wherein the appeal filed by the Revenue was also dismissed in SLP No. 23650 of 2018 and CIT Vs. Caraf Builders (Del-HC), we hold that disallowance made by the Assessing Officer cannot be sustained.

3. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 03/01/2024.

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