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2016 (5) TMI 471 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Held that:- Rule 8D comes into operation where the Assessing Officer is not satisfied in relation to income which does not form part of the total income under this Act and thereafter if the Assessing Officer is unable to determine the amount of such expenditure incurred in relation to the income which does not form part of the total income then he may resort to the method with prescribed in Rule 8D of the IT Rules, 1962. Assessing Officer completely ignored the facts appearing in the computation of total income wherein assessee has added back security transactions tax of ₹ 69,482/- and management fees of ₹ 11,09,173/- to the net profit as per profit and loss account. As per submissions made by ld. AR it has been mentioned that dividend income of ₹ 4.29 crores is derived from mutual funds and assessee has paid a management fees of ₹ 11,01,973/- as a portfolio management fees to the portfolio manager who has taken care of the dealings of the assessee in regard to investment for various mutual funds including switching but not switching out from one fund to another in order to optimum benefit to the assessee. In the given situation where the assessee has himself added a sum of ₹ 11,71,455/- to its total income in relation to expenditure incurred for earning exempt income then there remains no reason to sustain the addition of ₹ 8,84,542/- as made by ld. Assessing Officer under the provisions of section 14A of the Act. We therefore, delete the same - Decided in favour of assessee
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