Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 662 - AT - Income TaxDisallowance u/s 14A - Held that:- It should be presumed that the assessee used own funds for making investments where assessee had both own funds as well as borrowed funds. The ld.CIT(A), on the same parity of reasoning, directed the AO to delete the addition under rule 8D(2)(ii). Therefore, we do not find any reason to interfere with the order of the ld.CIT(A) Once exempt income is earned, it means that some expenditure being incurred in relation to the exempt income which should be disallowed by applying formula laid down in rule 8D(2)(iii). Therefore, action of the AO is correct in applying rule 8D(2)(iii) but the amount of disallowance should be restricted to the dividend income.
|