Deletion of Rs. 6.70 Cr Addition by AO for Unexplained Share Capital and Premium: ITAT Sets Aside CIT(A) Order

Rule 8D Applicable Only if Taxpayer’s Calculation of Expenses for Exempt Income Found Inadequate: Delhi HC The Delhi High Court held that Rule 8D of the Income Tax Rules, which mandates the calculation of expenses related to exempt income, can only be invoked when the taxpayer's own calculation of such expenses is found inadequate or incorrect. In the case at hand, the Court ruled that if the taxpayer has provided adequate details regarding the allocation of expenses, the Assessing Officer cannot arbitrarily apply Rule 8D. This ruling provides clarity on how Rule 8D should be applied, ensuring taxpayers' freedom to calculate their own expenses unless proven otherwise by the tax authorities.