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2016 (9) TMI 748 - AT - Income TaxDisallowance under the provisions of Section 14A - benefit of deduction u/s 10A - Held that:- It is an admitted fact that the AO while making the disallowance invoked the provisions contained in Section 14A of the Act r.w.r. 8D of the Income Tax Rules, 1962, the provisions contained in Rule 8D are applicable w.e.f assessment year 2008-09. In other words, the provisions of Rules 8D are not applicable to the year under consideration which is the assessment year 2007-08. It is also noticed that neither the assessee gave the details of the expenses incurred for earning the dividend income nor the AO worked out the expenses directly related to earn the said income. We, therefore, deem it appropriate to set aside this issue back to the file of the AO for adjudicating the same denovo by keeping in view this fact that the Provisions of Rule 8D are not applicable for the year under consideration and only disallowance can be made for the expenses which are directly related to earn the exempt income during the year relevant to the assessment year under consideration i.e. assessment year 2007-08, if there is any increase in the business profit after making the disallowance then the benefit of deduction u/s 10A of the Act if available in accordance with law to the assessee is to be given. - Decided in favour of assessee for statistical purposes.
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