The Tax Publishers2020 TaxPub(DT) 0459 (Pune-Trib)

INCOME TAX ACT, 1961

Section 14A Rule 8D

While computing average value of investments for the purpose of rule 8D(2) only those investments which yielded exempt income during the year had to be considered.

Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Computation of average value of investments--AO also considered investments on which assessee had not earned any exempt income.

Assessee earned tax-free dividend income on investments in shares and claimed suo moto disallowance under section 14A. AO invoked rule 8D and re-worked disallowance under section 14A. While computing average value of investments for the purpose of rule 8D(2), AO also considered those investments on which assessee had not earned any exempt income during the income. Held: While computing average value of investments for the purpose of rule 8D(2) only those investments which yielded exempt income during the year had to be considered. Matter was remanded.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2014-15


INCOME TAX ACT, 1961

Section 35(2AB)

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