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2023 (7) TMI 1357 - AT - Income TaxDisallowance of expenditure u/s 14A r.w.r. 8D - as per assessee no disallowance of interest expenditure u/r 8D(2)(ii) can be made, as the assessee had sufficient interest free fund available by way of reserves and surplus to take care of the investment made in assets yielding exempt income - HELD THAT:- As there are no current investments in the impugned assessment years. All the investments have been carried over from earlier assessment years. It is further noticed, the assessee had sufficient interest free funds available with it by way of share capital, reserves and surplus. That being the factual position emerging on record, we hold that no disallowance of interest expenditure can be made under rule 8D(2)(ii). Hence, we direct the Assessing Officer to delete the disallowance made under Rule 8D(2)(ii) for both the assessment years under appeal. As regards the disallowance made under Rule 8D(2)(iii), respectfully following the ratio laid down in Vireet Investments (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] we direct the Assessing Officer to consider only those investments which have yielded exempt income during the relevant assessment years for computing average value of investments. Grounds are partly allowed.
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