Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1318 - AT - Income TaxDisallowance u/s 14A - AO recorded dissatisfaction regarding the genuineness of the assessee's claim of the expenses relating to exempt income with regards to his books of account maintained as the assessee has been unable to justify its claim by producing books of account - Held that:- It is not disputed that the assessee has substantial investments and has received tax free income. The AO has made no disallowance under rule 8D(2)(i) and Rule 8D(2)(ii) of the Income Tax Rules. So far disallowance under rule 8D (2) (iii) is concerned, we note that Coordinate Bench of ITAT Kolkata in the case of REI Agro Ltd. Vs. DCIT (2013 (9) TMI 156 - ITAT KOLKATA) has held that it is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments for the purpose of Rule 8D(2)(iii) of the Rules. The aforesaid view of the Tribunal has since been affirmed as correct by the Hon’ble Calcutta High [2014 (4) TMI 713 - CALCUTTA HIGH COURT ] We direct the assessing officer to compute the disallowance under Rule 8D(2)(iii) of the Rules by taking into account dividend bearing securities, that is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments. Therefore, we allow this appeal for statistical purposes.
|