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2021 (6) TMI 388 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D(2)(iii) - HELD THAT:- As the assessee had not earned any exempt income from the mutual funds therefore, the same in our considered view could not have been included for the purpose of computing the ‘average value of investments’ while quantifying the disallowance u/s 14A r.w. Rule 8D (2)(iii). Our aforesaid view is fortified by the order in the case of ACIT & Anr. Vs. Vireet Investment Pvt. Ltd. & Anr. [2017 (6) TMI 1124 - ITAT DELHI] In the said case it was observed by the Tribunal that as per rule 8D(2)(iii), only those investments were to be considered for computing ‘average value of investment’ which had yielded exempt income during year under consideration. Accordingly, in the backdrop of our aforesaid deliberations, we herein direct the A.O to exclude the mutual funds which had not yielded any exempt income during the year for the purpose of quantifying the disallowance under Sec. 14A r.w. Rule 8D(2)(iii) in the hands of the assessee. Inclusion of an amount on the basis of Form 26AS to the returned income of the assessee - HELD THAT:- We find, that as per Form 26AS commission income stated to have been received from “Abu Dhabi Commercial Bank Ltd. – Churchgate Branch” stands reflected in the annual tax statement of the assessee. In rebuttal, it is submitted by the ld. A.R that no part of the aforesaid amount of income belongs to the assessee. As the assessee had declined of having owned any part of the aforesaid income, the same, thus, could not have been summarily added by the A.O as its income. The assessee who had denied ownership of the aforesaid income or the source thereof, we are of the considered view that the A.O was not justified in adding the impugned amount as the income of the assessee. Multiple reasons leading to the aforesaid anomaly in reflection of the above mentioned amount in the annual tax statement of the assessee cannot be ruled out. Be that as it may, we are of the considered view that the matter in all fairness requires to be revisited by the A.O, who is directed to verify the aforesaid claim of the assessee. A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate its aforesaid claim - Appeal of the assessee is allowed
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