Invocation of rule 8D justified if exempt income is earned

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/-. Mut...