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TMI Blog2018 (11) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) TMI 156 - ITAT KOLKATA) has held that it is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments for the purpose of Rule 8D(2)(iii) of the Rules. The aforesaid view of the Tribunal has since been affirmed as correct by the Hon’ble Calcutta High [2014 (4) TMI 713 - CALCUTTA HIGH COURT ] We direct the assessing officer to compute the disallowance under Rule 8D(2)(iii) of the Rules by taking into account dividend bearing securities, that is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments. Therefore, we allow this appeal for statistical purposes. - ITA No.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Departmental Representative (DR), was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed of ex parte qua the assessee, after hearing Ld. DR for the Revenue on merits in terms of Rule 24 of the Income Tax Appellate, Tribunal, 1963. 4. The facts of the case which can be stated quite shortly are as follows: During the assessment proceedings the assessee submitted before the ld AO that assessee company did not maintain separate books of account to calculate the expenditure relating to its income which did not form part of total taxable income. So, the assessee has been unable to Justify its claim of expenditure disallowable u/s 14A of I.T. Act. Therefore, ld AO recorded dissat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C = the average of total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year (Rs.13,35,94,578/-[(Rs.133059673/-+ ₹ 134129483) / 2]; (iii) 0.5 % of the Average Investment [i.e. 0.5% of ₹ 12,51 ,95,000/ - ] : Rs.6,25,975/ - iv) Total [(i) + (ii) + (iii) ] : Rs.6,25,975/- Therefore, by applying the prescribed method as per Rule 8D of I.T. Rules, the ld AO made addition u/s 14A read with rule 8D (2) (iii) of the I.T. Act to the tune of ₹ 6,25,975/-. 4. Aggrieved by the order of the ld. Assessing Officer, the assessee carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol-Trib) has held that it is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments for the purpose of Rule 8D(2)(iii) of the Rules. The aforesaid view of the Tribunal has since been affirmed as correct by the Hon ble Calcutta High Court in G.A.No.3581 of 2013 in the appeal against the order of the Tribunal in the case of REI Agro Ltd. (supra). Therefore, we direct the assessing officer to compute the disallowance under Rule 8D(2)(iii) of the Rules by taking into account dividend bearing securities, that is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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