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2016 (5) TMI 108 - AT - Income TaxDisallowance u/s 14A - Held that:- The investment as on 31stMarch 2008 was ₹ 3,65,32,450/- whereas the reserve and surplus of the company as on 31st March 2008 was of ₹ 18,60,41,748/-which is much higher than the investment in exempt income earning assets. The assessee demonstrated the similar situation in the earlier years when the investment was made. Thus the facts of the case of the assessee are identical to the facts of the case of HDFC Bank Ltd (2014 (8) TMI 119 - BOMBAY HIGH COURT ) to hold that no addition can be made for interest of ₹ 12,27,050/- apportioned towards exempt income, out of the interest paid, under rule 8D(2)(ii) of the Rules. However, so far as the AO’s computation of expenditure to be disallowed under rule 8D(2)(iii) is concerned, the same in our view is in conformity with the rules, hence, the same do not call for any interference. Accordingly, the ground of the assessee is partly allowed.
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