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2014 (3) TMI 1128 - AT - Income TaxDisallowance made u/s 14A - Held that:- Where the assessee had incurred interest expenditure which is set-off against the interest income offered under the head ‘income from other sources’ and where no interest expenditure is remaining to be set off, there is no merit in the orders of the authorities below in making the disallowance under section 14A in line with Rule 8D(ii) of the IT Rules. The assessee during the year under consideration had earned dividend income of ₹ 305,730/- against which disallowance of ₹ 39,80,707/- was made by invoking the provisions of section 14A of the Act. We delete the addition made under section 14A read with Rule 8D(ii) at ₹ 33,08,071/-. In view of the assessee having incurred various expenditures, the disallowance warranted under Rule 8D(iii) at ½ % of the average of the value of investment at ₹ 672,635/- is upheld. The grounds of appeal No. 1 to 4 raised by the assessee are thus, partly allowed.
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