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2022 (3) TMI 25 - ITAT RAIPURDisallowance u/s 14A r.w.r. 8D - disallowance of the expenditure incurred for earning of the exempt income - HELD THAT:- We concur with the claim of the Ld. learned Authorized Representative for the assessee that no part of interest expenditure was liable to be disallowed in the hands of the assessee company. We, thus, in terms of our aforesaid observations vacate the disallowance of interest expenditure of ₹ 890,454/- made by the AO u/s.14A r.w.r.8D(2)(ii). Disallowance of the administrative expenses - AO by triggering the mechanism contemplated under Rule 8D(2)(iii) of the Income-tax Rules, 1962, we are of the considered view, that as stated by the ld. A.R, and rightly so, for the purpose of computing the disallowance of the administrative expenses the “average value of investment” has to be computed by considering only those investments which had yielded exempt income during the year under consideration. Our aforesaid conviction is fortified by the order of the Income-tax Appellate Tribunal, Special Bench, Delhi in the case of ACIT Vs. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein the Tribunal had held that for the purpose of computing the disallowance of the administrative expenses under Rule 8D(2)(iii) of the Income-tax Rules, 1962, only those investment have to be considered for computing the “average value of investments” which had yielded exempt income during the year under consideration - we herein direct the AO to rework out the disallowance of the administrative expenses u/s.14A r.w Rule 8D(2)(iii) by determining the “average value of investments” after considering only those investments that had yielded exempt income during the year under consideration. The Ground of appeal No.1 is allowed
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