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2016 (8) TMI 1521 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - HELD THAT - Assessee made certain investment with an object of acquiring controlling stake in a group concern and not for earning any income out of investment Assessing Officer was not justified in invoking provisions of section 14A read with Rule 8D in order to disallow a part of incidental dividend income earned on said investment. Similarly in Rainy Investments Pvt. Ltd. 2013 (1) TMI 961 - ITAT MUMBAI has held that share application money cannot be regarded as an investment in shares or an asset yielding tax-free income and neither is it capable of yielding any tax-free income thus no disallowance can be made u/s 14A. In the present case as per the working of the average value of tax free investment under rule 8D submitted by the assessee the assessee had made investment of Rs. 13, 73, 00, 000/-. Assessing Officer should not have included the share application money while working out the average value of investment under Rule 8D. Therefore the Ld. CIT(A) has rightly issued the direction to the A.O to exclude share application money of Rs. 13, 73, 00, 000/- for the purpose of computation of disallowance of u/s 14A.
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