Consider Only Dividend bearing Securities for Section 14A disallowance R.W. Rule 8D(2)(iii)

Pricewaterhouse Coopers Private Limited Vs ACIT, Circle-2(2) (ITAT Kolkata) Issue raised by the assessee is no linger res integra. The Coordinate Bench of Kolkata ITAT in the case of REI Agro Ltd. vs. DCIT [(2013) (144 ITD 141)] has held that only dividend bearing securities should be considered for the purpose of disallowance under rule 8D(2) (iii) of the Income Tax Rules. The relevant findings of the Coordinate Bench are given below: “8.1 Thus, not all investments become the subject-matter of consideration when computing disallowance under section 14A read with rule 8D. The disallowanc...