2016 (5) TMI 1533

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....RDER N.R.S.Ganesan,  This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-1, Chennai, dated 24.3.2015 and pertains to assessment year 2010-11. 2. The only issue arises for consideration is disallowance of expenditure u/s 14A. 3. Shri A.Vasudevan, ld. Representative for the assessee submitted that the assessee accounted Rs. 1,21,166/- as div....

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....ing the exempted income. In the case before us, according to the ld. DR, the assessee earned income which was exempted from tax, therefore, the expenditure incurred for earning such income has to be computed as per the procedure laid down in Rule 8D. The third limb of Rule 8D provides for disallowance of 0.5% of the average investment which yielded the exempted income. The Assessing Officer after ....

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....irectly attributable to any particular income or receipt. Therefore, the second limb of Rule 8D is also not applicable. Now coming to third limb of Rule 8D, an amount equal to 0.5% of the average value of the investment, income from which does not or shall not form part of the total income as appearing in the balance sheet of the assessee as on the first day and last day of the previous year, has ....