Case Law Details
Poonawalla Finance Pvt. Ltd. Vs DCIT (ITAT Pune)
The only issue pressed is about restricting the addition under Rule 8D of the Income-tax Rules, 1962 by considering only such investments which yielded tax free dividend income.
Hon’ble Delhi High Court in ACB India Ltd. vs. CIT (2015) 374 ITR 108 (Del) has held that the average value of investments, for the purposes of Rule 8D(2)(iii), should be confined to those securities in respect of which exempt income is earned and not the total investments. Similar view has been taken by the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments (P) Ltd. (2017) 165 ITD 27 (Del) (SB). In view of the afore referred precedents, we set aside the impugned order to this extent and remit the matter to the file of the AO for re-computing the disallowance under Rule 8D(2)(iii) by considering only such investments, in calculating the average value of investments, which yielded exempt income during the year. The assessee will be allowed hearing opportunity in such fresh proceedings.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee arises out of the order dated 08-08-2019 passed by the CIT(A)-11, Pune in relation to the assessment year 2013-14.
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