Case Law Details
Outsource Partners International (P.) Ltd. Vs DCIT (ITAT Bangalore)
It was not a case where no exempted income is earned and AO applied rule 8D for as rule 8D of Income Tax Rules takes care of all aspects of interest bearing funds and interest free funds and expenditure incurred in management of portfolios, etc., once it is decided that section 14A is to be invoked, disallowances are to made as per rule 8D. Accordingly, there was no infirmity in the order of AO.
We find that the assessee has made substantial investments of 8,73,53,000/- and has earned the dividend income of Rs.23,53,000/-. Mutual fund is exempt under section 10(34) of the Act. The AO having examined the contentions of the assesse has made the additions after applying the Rule 8D of the Rules. It is not a case where no exempted income is earned. Assessee has earned the exempted income and the AO has invoked the provisions of section 14A and applied Rule 8D for determining the disallowances. Since rule 8D takes care of all aspects of interest bearing funds and interest free funds and expenditure incurred in management of portfolios etc., we are of the view, that once it is decided that provisions of section 14A is to be invoked, disallowances are to made as per Rule 8D of the Rules. A
FULL TEXT OF THE ITAT JUDGMENT
These cross appeals are preferred by the assessee as well as the revenue against the respective orders of the AO passed consequent to the directions of DRP. Since all these appeals were heard together, these are being disposed off through this consolidated order. We however we prefer to adjudicate them one after the other.
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