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2020 (10) TMI 1314 - AT - Income TaxAddition u/s 14A r.w.r. 8D - CIT-A deleted the addition - as per revenue CIT(A) ignored the fact that the assessee had incurred huge interest expenses in relation to investments in the instruments income which is exempt - HELD THAT:- The assessment order itself reveals that in so far as the direct expenses u/r. 8D(2)(i) are concerned, the AO accepted that no direct expense was incurred by the assessee for earning the exempt income. There is no denial of the fact from the Revenue that as on 31.03.2014, the share capital of the assessee was ₹ 103.40 crores which is more than enough to cover the investments of ₹ 86.208 crores and therefore, the presumption is that the assessee invested the amounts from out of their own funds and therefore, the question of disallowing the interest component u/r. 8D(2)(ii) does not arise. In so far as consideration of investment which did not yield any dividend income for the purpose of calculating the disallowance u/r. 8D(2)(iii), it is the settled principle of law that only such investments which yielded exempt income during the year have to be considered for computing the average value of investment, and the investments which did not yield any exempt income shall not be considered. Admittedly, the assessee disallowed by following this calculation. Ld. CIT(A) rightly followed the decision of Special Bench of this Tribunal in the case of ACIT vs. Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] which is binding precedent on this aspect. - Appeal of revenue dismissed.
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