2019 (6) TMI 435

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....sessee has made investment in shares and mutual funds and also the assessee has claimed a sum of Rs. 3,54,904/- towards interest paid and Rs. 7,414/- as bank and demat charges. Accordingly, the AO asked the assessee to explain as to why disallowance u/s. 14A of the Income-tax Act, 1961 (hereinafter referred to as the "Act") should not be made in the view of investment which is related to exempt income. In response, the Ld. AR of the assessee replied vide letter dated 19.01.2016 which has been reproduced by the AO at page 2 in his assessment order. And after considering the said reply, the AO observed that the Ld. AR of the assessee has presented an overall view of the matter but failed to file the specific utilisation of the loan received a....

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....is noted that assessee has deployed own funds to the tune of Rs. 4.39 cr. and investment to earn exempt income is only to the tune of Rs. 46 lacs, so, no disallowance need to be made under Rule 8D(2)(ii) of the Rules. For that we rely on the decision of the Hon'ble Bombay High Court in CIT-vs.- Reliance Utilities & Power Ltd. reported in 313 ITR 340 (Bom.). Further, in respect of disallowance under Rule 8D(2)(iii) the AO is directed to compute 0.5% on the investment on which the assessee earned dividend income as held by this Tribunal in REI Agro Ltd. 144 ITD 141. 5. The next issue is with regard to the annual letable value of the house property which the assessee stated to have inherited from his mother on which the AO has calculated the ....