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2016 (12) TMI 753 - AT - Income TaxDisallowance under section 14A r.w. Rule 8D - Held that:- The mandate of Rule 8D will follow as per the method prescribed for making disallowance under section 14A of the Act. In the case on hand, we find that the AO has gone directly to the second stage of invoking Rule 8D to make the disallowance under section 14A r.w. Rule 8D, only on the factually incorrect and uncorroborated assumption that the assessee agreed to disallowance thereunder; without considering or addressing the submission made by the assessee vide letter dated 05.11.2012 that no expenditure was incurred and rendering a finding on the correctness or otherwise of the assessee's claim that no expenditure was incurred by her to earn the exempt income which does not form part of total income. We therefore set aside the finding of the authorities below on this issue and restore the matter to file of the AO for fresh examination and adjudication of the issue of whether or not disallowance under section 14A r.w. Rule 8D is called for at all, after taking into consideration of our above observations and after affording the assessee adequate opportunity of being heard and examining the assessee's claims in this regard. We hold and direct accordingly. - Decided in favour of assessee for statistical purposes.
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