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2022 (7) TMI 379 - ITAT KOLKATADisallowance of expenses claimed by the assessee as business expenses - Addition made as assessee had no business - HELD THAT:- As both, ld. CIT(A) and the ld. AO have taken a rational approach by making a disallowance to an extent of 50% of the expenses claimed as business expenses, more particularly in a given situation where the issue of non-submission of details of expenses along with supporting documents has not been controverted by the assessee except for embarking upon the appellate orders of preceding years without bringing on record, similarities in the facts and issues dealt therein and when 98.7% of the total area of the building has been let-out for earning rental income and only 1.3% is available otherwise. Accordingly, ground of appeal no. 1 and 2 of the appeal by the assessee are dismissed. Disallowance u/s. 14A r.w.r. 8D(2)(iii) - assessee submitted that no expenditure was incurred to earn exempt dividend income - HELD THAT:- We note that this issue is no longer res integra and is covered by the decision of the Hon'ble Jurisdictional High Court of Calcutta in the case of CIT v. REI Agro Ltd. [2013 (12) TMI 1517 - CALCUTTA HIGH COURT] which has upheld the findings of the ITAT by holding that only those investments could be considered for the purposes of disallowance under rule 8D(2)(iii) which had yielded tax free dividend income during the year. Respectfully following the decision of the Hon'ble Jurisdictional High Court [2013 (12) TMI 1517 - CALCUTTA HIGH COURT], we find it proper to remit this specific issue to the file of the ld. AO for the limited purpose of verification and to re-compute the disallowance under Rule 8D(2)(iii) by considering the decision supra. Accordingly, this ground no. 3 of appeal by the assessee is allowed for statistical purposes.
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