INCOME TAX ACT, 1961

Section 14A Rule 8D(2)(iii)

Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D(2)(iii) - AO considered non-dividend bearing securities also for average value of investments

Assessee earned tax free dividend income. AO computed disallowance of administrative expenses under section 14A read with rule 8D(1)(iii), however, by considering non-dividend bearing investments also for computation of average value of investments.Held: Only dividend bearing securities had to be considered for the purpose of disallowance under rule 8D(2)(iii). AO was directed accordingly.

REFERRED : REI Agro Ltd. v. DCIT (2013) 144 ITD 141 (Kol-Trib) : 2013 TaxPub(DT) 2256 (Kol-Trib)

FAVOUR : In assessee's favour.

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 37(1)

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