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2022 (1) TMI 783 - AT - Income TaxDisallowance u/s 14A - Disallowing interest expense - the said proportionate expense claimed by the Appellant was for earning exempted income i.e. share in profit - HELD THAT:- We find that the Assessing Officer while passing the assessment order identified the issue of disallowance under section 14A, by examining the fact that assessee had earned exempt income and invested interest bearing fund for making investment for earning exempt income. However, the Assessing Officer instead of following the formula prescribed under Rule 8D made proportionate disallowance and worked out the disallowance @ 58.36% . CIT(A) confirmed the action of Assessing Officer. We find that during the year AY 2014-15 the provision of under section 14A r.w.s. Rule 8D is applicable. The Assessing Officer has not followed the formula prescribed under Rule 8D. Neither the assessee furnished the working of disallowances under section 14A, nor the lower authority made the disallowance as per the formula prescribed under Rule 8D, therefore, we restore the matter back to the file of Assessing Officer to re-compute/ rework the disallowance under section 14A read with Rule 8D. The assessee is also directed to explain the working of disallowance under section 14A before the Assessing Officer as and when called for. The Assessing Officer shall consider the working so provide by assessee and pass the order in accordance with law. Appeal of the assessee is allowed for statistical purposes
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