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Rule 8D Cannot Be Mechanical: Only Net Interest & Income-Yielding Investments Count, Says ITAT
Case Law Details
- Case Name
- Opelina Finance & Investment Ltd. Vs ITO (ITAT Delhi)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2014-15
- Courts
- All ITAT, ITAT Delhi
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Opelina Finance & Investment Ltd. Vs ITO (ITAT Delhi)
Assessee had investments of ₹422 crore & earned exempt dividend income. It voluntarily disallowed ₹3.40 crore u/s 14A. The AO, without recording proper satisfaction, mechanically applied Rule 8D & made a total disallowance of ₹11.67 crore, adding an extra ₹8.27 crore. CIT(A) confirmed the disallowance in normal computation but deleted it from MAT.
Before Tribunal, Assessee argued that the AO:
did not record satisfaction as required under Section 14A(2);
wrongly used gross interest instead of net...
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