During year under consideration, assessee made investments in foreign companies from which dividend income was received  which was taxable. Assessee contended that  investments in foreign companies be excluded while applying  the provision of section 14A  and also contended that investments in Indian companies from which no dividend income was received during year be excluded while computing disallowance of expenditure. The AO disallowed expenses invoking rule 8D(2)(iii) by applying 0.5 per cent of average investment.  Tribunal held that investments in Indian companies which did not yield exempt income during year could not be included while computing disallowance of expenditure. Matter remanded.  (AY. 2007-08, 2009-10)