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2021 (8) TMI 605 - AT - Income TaxDisallowance u/s.14A r.w.r. 8D - assessee has paid interest on certain loans which are borrowed for specific purposes. Therefore, if the assessee is able to prove utilization of loans for specific purposes, then interest relatable to said loans cannot be included for computation of disallowances under Rule 8D(2)(ii) of Income Tax Rules, 1962 - HELD THAT:- Assessee claimed that while computing disallowance under Rule 8D(2)(iii), the Assessing Officer has included investments made in overseas subsidiaries and income from which is taxable under Indian laws. We find that it is a well settled principles of law that dividend earned from overseas investments is taxable in Indian law, therefore, for the purpose of computing other expenses under Rule 8D(2)(iii), those investments need to be excluded. It is well settled principles of law by the decision in the case of ACIT Vs. Vireet Investments Pvt .Ltd. [2017 (6) TMI 1124 - ITAT DELHI] that only those investments which yielded exempt income for the year needs to be considered for computation of disallowance of other expenses. The assessee has filed working explaining computation of disallowance u/s.14A r.w. Rule 8D of the Income Tax Rules, 1962. The said computation was not available to the AO at the time of assessment proceedings - we are of the considered view that the issue needs to go back to the file of the AO for re-consideration in light of revised working filed by the assessee. Hence, we set aside the appeal to the file of AO and direct him to recompute disallowance of expenses relatable to exempt income u/s.14A of the Act in accordance with our directions given herein above.
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