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2013 (8) TMI 825 - AT - Income TaxDisallowance u/s 14A - CIT deleted disallowance - Held that:- assessee made an investment in shares, which yielded dividend income and interest income - It is an admitted fact that assessee offered itself average cost of investment - it is the case where the assessee disallows the cost of investment applying the rate of 0.5% of the average cost of the investment in accordance with the Rule 8D(2)(iii) of the Income tax Rules 1962 but not out of the administrative expenditure as per the provisions of clause (i) and (ii) of the said Rule 8D(2) - where the accounts for exempt and taxable income are maintained commonly, it cannot be denied that some administrative expenditure was definitely attributable towards the earning of the dividend income - Assessee is engaged in the banking activity and it is an admitted fact the current balance is the source of investment in shares and assessee has not demonstrated how the interest bearing funds are lying in the current accounts of the assessee, a banking company. Normally, every amount lying in the current accounts is interest bearing ones, therefore, the provisions of clause-(iii) of Rule-8D(2) is rightly applicable - Once rule become applicable and the same has to be applied fully - Decided in favour of Revenue.
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