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2017 (3) TMI 261 - AT - Income TaxAddition u/s 14A - whether the provisions of section 14A can be invoked to make a disallowance on account of expenditure incurred in relation to the exempt income in the form of dividend received by the assessee on the shares held as stock-in-trade? - Held that:- Disallowance is to be made under section 14A of the Act in relation to those shares which are held as stock in trade has been settled in the case of Dhanuka & Sons Vs. CIT [2011 (4) TMI 861 - CALCUTTA HIGH COURT] as held that the provisions of section 14A of the Act are very much attracted on those investments which are held as stock in trade. The provisions of section 14A of the Act are very much attracted on those investments which are held as stock in trade. However before us, the ld. counsel for the assessee has raised an alternative contention that even if section 14A read with Rule 8D is held to be applicable in the case of the assessee, the Assessing Officer may be directed to compute the disallowance as per Rule 8D by taking into consideration only those shares which have yielded dividend income in the year under consideration. Since this issue raised by the ld. counsel for the assessee as an alternative contention is squarely covered in favour of the assessee by the decision of the Coordinate Bench of this Tribunal in the case of REI Agro Ltd. (2013 (9) TMI 156 - ITAT KOLKATA), we direct the Assessing Officer to compute the disallowance as per Rule 8D by taking into consideration only those shares, which have yielded dividend income in the year under consideration. The alternative contention of the ld. counsel for the assessee is accordingly accepted.
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