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| The Tax Publishers2020 TaxPub(DT) 0572 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
Only those investments which yielded exempt income could be considered for the purpose of working out disallowance under rule 8D(2). Accordingly, AO was directed to recompute disallowance under rule 8D(2)(iii).
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D(2)(iii) - Computation of average value of investments--AO also considered investments not having yielded exempt income
Assessee earned tax fee dividend income on certain investments in shares. AO invoked rule 8D(2)(iii) read with section 14A and also considered non-exempt income yielding investments while calculating average value of investments. Held: Only those investments which yielded exempt income could be considered for the purpose of working out disallowance under rule 8D(2). Accordingly, AO was directed to recompute disallowance under rule 8D(2)(iii).
Relied:Vireet Investments (2017) 165 ITD 27 (Del) : 2017 TaxPub(DT) 1760 (Del-Trib).
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 40(a)(ia)
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