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2017 (4) TMI 239 - ITAT CHENNAIDisallowance under Section 14A - Held that:- Rule 8D has come into effect only from 24.03.2008. Therefore, in the case of the assessee for assessment year 2007-08, Rule 8D cannot be applied. 2% of the exempt income would suffice for disallowance under Section 14A of the Act. Therefore we hereby direct the Ld. AO to disallow 2% of the exempt income as the expenditure incurred for earning exempt income. Depreciation on building - Held that:- From the facts of the case it is apparent that the assessee had purchased the building on 31.03.2007. The property was registered on the very same day. Therefore, though the assessee might have taken possession of the property on 31.03.2007, there was no possibility for the building to be put to use on the same day. It is obvious that after purchase of the building some basic maintenance work would have been required before putting the asset to use. Therefore we do not find any merit in the arguments advanced by the Ld. AR. Accordingly this ground is decided against the assessee and the orders of the Revenue authorities are upheld on this issue. Applicability of the provisions of the Section 14A with respect to subsidiary companies (for the assessment years 2008-09 & 2010-11) - Held that:- Remit back the matter to the file of the Ld. AO to consider the issue afresh in the light of the above order of the Tribunal and pass appropriate order in accordance with merits and law. We also make it clear that for the investments made in mutual funds, provisions of Section 14A read with Rule 8D will be applicable since the assessee would incur some expenditure at least for the decision making process as to in which mutual fund the investment has to be made and at what point of time exit from such funds.
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