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2012 (10) TMI 247 - AT - Income TaxDis-allowance u/s 14A of interest paid on O/D Account and other interest - assessee in receipt of dividend income, exempt from tax other than salary income and interest income - assessee contended that over-draft facility was used towards investment in shares on which the assessee has shown “gain” and offered to tax - Held that:- Applicability of the provisions of section 14A is now to be determined in the light of the order in the case of Godrej & Boyce Mfg. Co.Ltd. Mumbai vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) wherein Court has recapitulated the conclusion and pronounced that a finding is required whether the investment in shares is made out of own funds or out of borrowed funds. U/s 14A, expenditure incurred in relation to exempted income is to be disallowed only if the Assessing Officer is satisfied with the expenditure claimed by the assessee pertaining to the said exempt income. Court has made very specific that in case, no such exercise was carried out by the Assessing Officer then the matter is to be remanded back for afresh investigation and provisions of Rule 8D shall apply w.e.f. AY 2008-09; Since Assessing Officer had not enquired the issue in the light of the above legal pronouncement. Specially the pronouncement of the High Court was not available at that time, hence, the Assessing Officer’s assessment order was devoid of merits as also the law applicable. Matter restored back.
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