Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 1295 - AT - Income TaxDisallowance of expenditure under section 14A read with rule 8D - Held that:- We find that the issue is squarely covered in favour of the assessee in the own case of the assessee for the earlier assessment year. The strategic investments in group companies and sister concerns for having control over the management of the said companies are not intended for the purpose of earning of exempt income. Under such circumstances for computing the average value of investment for the purpose of disallowance under rule 8D(2)(iii), the investments made in unquoted shares of the subsidiaries sister concerns/group companies for strategic purposes are required to be excluded. We, therefore, direct the AO to verify as if the assessee has net positive interest income during the year, then no disallowance of interest is to be made under section 8D(2)(ii) and further direct the AO to exclude the strategic investments made in subsidiaries while computing disallowance of administrative expenses under rule 8D(2)(iii) of the IT rules.
|