TMI Blog2014 (4) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... investment from which the income has been earned which is not falling within the part of total income that is to be considered. Thus, it is not the total investment at the beginning of the year and at the end of year which is to be considered but it is the average of the value of the investment which has given rise to the income which does not form part of total income is to be considered. Hence, the issue is restored back to the file of AO to verify as to how much investment was made during the year on which the assessee has earned exempt income and, accordingly, re-compute the disallowance under Rule 8D of the Income Tax Rules, 1962. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 2328/Ahd/2012 - - - Dated:- 11-4-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A was dismissed. 3. The assessee is in further appeal before us. The ld.counsel for the assessee submitted that the addition is made while invoking the provisions of section 14A r.w.r 8D of the Income Tax Rules, 1962 amounting to ₹ 14,16,572/-. He submitted that the authorities below failed to appreciate the fact that the assessee has earned exempt income amounting to ₹ 11,67,949/-. He further submitted that the authorities below have wrongly invoked the provisions of Rule 8D. He submitted that no borrowed capital has been utilized for the purpose of investment. He submitted that the assessee is having sufficient interest-free funds to make investment. In support of this contention, he placed reliance on the balance-shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, which is ex-facie illegal and unjustified. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find force in the contention of the ld.counsel for the assessee that the interest has been wrongly taken as the assessee has sufficient interest-free funds available, hence the addition made on account of interest amounting to ₹ 1,37,060/- is hereby directed to be deleted. In respect of the disallowance towards administrative expenses, since both the authorities below have not given finding as to whether the % of average investment is of those investments wherefrom the assessee has earned exempt income. As per the provision of Rule 8D, it is only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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