The totality of facts clearly indicates that no borrowed funds were utilized for earning the exempt income by the assessee and further the dividend were directly credited in the bank account of the assessee and no expenditure was claimed. The assessee only received Rs.1,82,362 as dividend income, therefore, there is no question of disallowance of Rs.14,58.412 by invoking section 14A r.w. Rule 8D. At best, if any disallowance could be made that can be restricted to Rs. 1,485 which were claimed as demat charges. Disallowance u/s 14A r.w. Rule 8D cannot exceed the exempt income.
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