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2016 (1) TMI 1337 - AT - Income TaxDisallowance u/s 14A r.w.r 8D - Held that:- In the case of CIT Vs Gujrat Power Corporation Ltd (2011 (3) TMI 1440 - Gujarat High Court) as held that the assessee had demonstrated that it had other sources of investments and no part of the borrowed could be stated to be used for the purpose of earning tax free income, the invocation of the provisions of section 14A for taxing such interest was not justified. Thus we respectfully following the ratio laid down, delete the addition of ₹ 5,49,368/- under rule 8D(2)(ii). As regards the balance addition of ₹ 4,21,973/- we find merit in the arguments of the ld AR that 0.5% of dividend yielding investments should be disallowed and not on the entire investments . We, therefore direct the AO to calculate the disallowance of 0.5% under rule 8D(2)(iii) by taking those investments which yielded dividend during the year. Thus, the appeal of the assessee is partly allowed. The AO is directed accordingly. - Decided in favour of assessee.
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