No disallowance under rule 8D(2)(ii) r.w. sec. 14A in absence of diversion of interest bearing funds
Case Law Details
Case Name : DCIT Vs SIL Investment Ltd. & Vice-Versa (ITAT Delhi)
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DCIT Vs SIL Investment Ltd. (ITAT Delhi)
In the present case As assessee had established nexus of interest expenses with its main activity of financing and there was not a single amount of interest bearing borrowings which could be related with investment which yielded tax-free dividend income, no disallowance under rule 8D(2)(ii) was called for. AO was directed to compute disallowance under rule 8D(2)(iii) at the rate of 0.5% of investments which actually have resulted in the exempt dividend income.
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