Sec. 14A, 36 & 37 of Income Tax Act, 1961 – Business Expenditure – One of the issue of the appeal of the revenue relates to the disallowance of expenditure to be made in case of the assessee in terms of Rule 8D(2)(iii) of IT Rules 1963 r/w. Section 14A of the Act, 1961. The AO and the CIT(A) had made disallowance of Rs. 14.61 Lakhs in case of the assessee in relation to indirect expenses for earning exempt income @ 0.5% of the average investments. The Tribunal in further appeal by the assessee retained 6.61 Lakhs by giving relief to the assessee to the extent of Rs. 8 Lakhs on the ground that Rule 8D cannot be applied blindly when the assessee had hardly incurred any expenses in relation to the dividend earned and substantial investments were made temporarily in order to park the idle funds. High Court did not inclined to admit the appeal and held that:– We may recall, sub-section (2) of Section 14A of the Act provides that the AO would determine the amount of expenditure incurred in relation to income which does not form part of the total income if he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. If the expenditure already voluntarily disallowed by the assessee is found to be reasonable, the AO in any case could not have resorted to Rule 8D of the Rules – LEE AND MUIRHEAD PVT. LTD. [2020] 423 ITR 167 (BOM)