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2022 (2) TMI 1057 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Mandation of recording satisfaction - as per assessee in absence of recording of proper satisfaction, the disallowance made by the AO and sustained by the CIT(A) is not correct - HELD THAT:- Assessee has received dividend income only in respect of one scrip and the average investment - We find, the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that only the investments that has yielded exempt income during the year has to be considered for computing the average value of investment u/s. 14A r.w.r. 8D of the Income-tax Rules, 1962. Hon'ble Delhi High Court in the case of ACB India Ltd. vs. ACIT [2015 (4) TMI 224 - DELHI HIGH COURT] has held that for the purpose of provisions of section 14A, instead of taking into account the total investment, the investment attributable to dividend was required to be adopted and, thereafter, the disallowance was to be arrived at. We, therefore, deem it proper to restore the issue to the file of the AO with a direction to recompute the disallowance u/s. 14A r.w.r. 8D by considering the investments which has actually yielded dividend income and decide the issue as per fact and law, after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
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