Rule 8D Disallowance should be Based on Average Investment Value: ITAT Mumbai

Air India Limited Vs ACIT (ITAT Mumbai) ITAT Mumbai held that disallowance under rule 8D(2)(ii) r.w.s. 14A of the Income Tax Rules should be made on average value of investment yielding exempt income and not on the basis of quantum of investment based on market value. Disallowance restricted accordingly. Facts- In course of assessment proceeding, the Assessing Officer (AO) noticed that, in the year under consideration, the assessee had received exempt income, by way of dividend, amounting to Rs.4,58,77,493/-. Whereas, the assessee has not made any suo motu disallowance of expense attributable ...