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2016 (4) TMI 1418 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Quantum of disallowance - AO noticed by the AO that the assessee has earned dividend income on investment made and the same is claimed to be exempt from tax - assessee disputed the quantum of disallowance worked out by the AO as per rule 8D by submitting that only the investment on which the exempt income was actually earned by the assessee during the year under consideration should be taken into consideration and not the entire investment as done by the AO - HELD THAT:- As per decision of REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA] wherein it was held that for computation of disallowance section 14A by applying Rule 8D(2)(ii), only those investments shall be considered which earn exempt income and not the total investment appearing in the balance-sheet. Respectfully following the said decision we direct the AO to recompute the disallowance to be made under section 14A by applying Rule 8D after taking into consideration only the investment which actually earned the exempt income and not the entire investment. Appeal filed by the assessee is partly allowed. :-
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