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2014 (11) TMI 982 - ITAT CHENNAIDisallowance under section 14A - whether CIT(A) has failed to appreciate that investments in subsidiaries are out of commercial expediency and hence should not be considered for disallowance under section 14A - Held that:- Respectfully following the said decision of Asst. CIT v. Oriental Structural Engineers P. Ltd. [2011 (12) TMI 6 - ITAT DELHI] wherein held that no expenses and interest attributable to the investments made by the assessee in SPVs can be disallowed under section 14A read with rule 8D because it cannot be termed as expense/interest incurred for earning exempt income, we direct the Assessing Officer to recompute the disallowance under section 14A by excluding the investments made in special purpose vehicles and consider only the balance investments for the purpose of disallowance under section 14A of the Act. The Assessing Officer shall calculate disallowance under section 14A the interest expenses directly incurred for earning exempt income on the investments other than the investments made in special purpose vehicles plus 2 per cent. of the dividend income earned on the investments other than investments made in special purpose vehicles after verifying the total investments made by the assessee and after providing adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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