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2018 (11) TMI 1111 - ITAT MUMBAIDisallowance u/s 14A read with Rule 8D - CIT(A) has directed the AO to exclude the investment made in growth funds while computing the average value of investments since the growth funds do not yield any dividend - Held that:- Assessee, by placing reliance on the Special Bench decision rendered in the case of Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has requested for exclusion of investments which did not yield dividend income during the year under consideration for the purpose of computing average investments. We find merit in the said request of the assessee as the said plea is in accordance with the decision rendered by the Special Bench referred supra. Accordingly we modify the order passed by the CIT(A) and direct the AO to exclude the investments made in growth funds as well as investments which did not yield dividend income during the year under consideration while working out average value of investments. The amount of ₹ 1,26,000/- voluntarily disallowed by the assessee should be given set off against the amount of disallowance computed under Rule 8D(2)(iii) of the I.T. Rules for the reasons discussed above. We order accordingly. AO has not recorded proper satisfaction as contemplated under Section 14A(2) of the Act. However, he did not press the same during the course of hearing and hence we decline to adjudicate the said plea of the assessee. Appeal filed by the assessee is partly allowed.
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