2016 (2) TMI 919

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..... d the dividend income earned by the assessee. We direct the AO to recompute the disallowance taking only those investments which yield dividend income and apply Rule 8D(2)(iii) and such disallowance should not exceed the dividend income earned by the assessee. Decided in favour of assessee for statistical purpose. - ITA No. 8581/Mum/2011 - - - Dated:- 24-2-2016 - C. N. Prasad (Judicial Membe .....

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..... ustained the disallowance observing that the AO computed the disallowance u/s. 14A r.w. Rule 8D(2)(iii) being 0.5% of the average value of investment shown in the balance sheet and therefore the action of the AO is correct. 5. We find from the assessment order that the assessee in the course of assessment proceedings submitted working of disallowance of expenditure u/s. 14A of the Act and such .....

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..... that only those investments which would yield dividend and which is exempt should be considered for disallowance under Rule 8D(2)(iii). We also hold that the disallowance under section 14A should not exceed the dividend income earned by the assessee. We direct the AO to recompute the disallowance taking only those investments which yield dividend income and apply Rule 8D(2)(iii) and such disallowa .....

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