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2021 (4) TMI 110 - ITAT HYDERABADDisallowance u/s 14A rwr 8D - AO referring to the CBDT Circler No. 05/2014, dated 11/02/2014, computed the disallowance u/s 14A rwr 8D(ii) by holding that since the assessee had investments during the year the disallowance u/s 14A as per the amended rule 8D, has to be made - HELD THAT:- It is settled position of law that the provisions of section 14A can be applied to quantify the expenses in relation to exempt income. The Rule 8D can be applied only when there is difficulty in finding the expenditure relating to exempt income. In the case under consideration, we find during the course of hearing that the assessee has not derived any exempt income in the relevant previous year so as to attract section 14A rwr 8D as per case law Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT], Chettinad Logistics Private Limited [2017 (4) TMI 298 - MADRAS HIGH COURT] and CIT vs. Corrteck Engineering Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT]. It is however made clear that the learned Assessing Officer shall be at liberty to examine the assessee’s financials along with source of investments in the year in which they yield exempt income. Appeal of the revenue is allowed for statistical purposes.
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