Share application money not to be included in average investment in disallowance u/s 14A r.w. Rule 8D

Brief of the Case ITAT Kolkata held In the case of ITO vs. M/s LGW Ltd that share application money is only in the nature of an offer to buy shares made by the assessee. It is only after the offer is accepted by the company; the Assessee becomes the shareholder in a company. Till this time the Assessee becomes a shareholder, the assessee cannot have any rights to claim any dividend that may be declared by the company. In such circumstances we are of the view that while working out the average value of the investments u/s 14A read with rule 8D (2)(iii), the share application money should not be...