Relief for Air India: ITAT directs Use of Average Value u/r 8D for Accurate Investment Calculation, Replacing AO’s Market Value Approach

The ITAT directed Air India to use an average value approach under Rule 8D for accurately calculating investments for tax purposes, replacing the market value approach previously used. The ruling came after Air India contested the tax disallowances made on investment income based on the market value approach. The Tribunal found that the average value method would provide a more accurate assessment of the company’s tax obligations. This decision brings clarity to the method of investment valuation for tax purposes and aims to reduce disputes between taxpayers and tax authorities.