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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO
अऩीराथी की ओय से / Appellant by : Shri Ruturaj Gurjar प्रत्मथी की ओय से/ Respondent by : Ms. Beena Santosh, DR सुनवाई की तायीख / Date of Hearing : 23.03.2017 घोषणा की तायीख /Date of Pronouncement : 24.03.2017 आदेश / O R D E R PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee on 3.5.2016 is against the order of the CIT (A)20, Mumbai dated 27.1.2016 for the assessment year 2008-2009.
In this appeal, assessee raised the various argumentative grounds and submitted that all of them relate to the disallowance u/s 14A read with Rule 8D(2)(iii) of the Income Tax Rules, 1962.
Briefly stated relevant facts of the case are that during the year assessee earned exempt dividend income of Rs. 41,19,050/-. Assessee did not make any disallowance u/s 14A of the Act. However, in the assessment proceedings, AO quantified the disallowance of Rs. 4,24,975/- applying 0.5% on the average investments. Bringing my attention to the average investment, Ld Counsel for the assessee submitted that the Assessing Officer / CIT (A) erred in including the new ineligible investments in the said average investment calculations thereby excess amount was disallowed under clause (iii) of Rule 8D(2) of the IT Rules. Ld Counsel for the assessee found mistake in considering the average investment of Rs. 8.42 Crs (rounded of) and mentioned that around Rs. 6.50 Crs should be the correct average investments.