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2017 (11) TMI 1671 - AT - Income TaxAddition u/s 14A r.w.r. 8D - Held that:- We agree with the contention of the assessee that, if the investment which are generating taxable income or are capable of earning taxable income, then same should be removed from the working of the average investment under the formula given under Rule 8D(2)(iii), because the said clause itself refers to the working of the average value of the investment, the income from which does not or shall not form part of the total income. This inter alia means that, if the investment which is generating income or is capable of earning taxable income, then same should not be the part of the working of average value of the investment. Thus, we direct the Assessing Officer to remove the investments, which are either generating taxable income or capable of earning taxable income. The disallowance under Rule 8D(2)(iii) thus, should be worked out after removing such investments. The grounds raised by the assessee are accordingly treated as allowed. Thus maintaining the consistency with the earlier year order of the Tribunal in assessee’s own case, hold that the disallowance made under rule 8D(2)(iii) has to be worked out after excluding the investments which are capable of earning of taxable income. Accordingly, the appeal of the assessee is allowed.
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