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2015 (1) TMI 1223 - ITAT BANGLOREDisallowance u/s 14A read along with rule 8D(2)(ii) - CIT(A) deleted the addition - Held that:- When assessee is having own funds substantially in excess of its investment, it can always claim that the latter was made out of the former. A one-to-one relationship showing each sum going into the common kitty and going out therefrom, cannot be considered as an essential criteria for evaluating the nature of interest outgo. In a business environment, when assessee places all his money, whether from loans or from business operation in one kitty and makes investments therefrom, it can always argue that, like any normal businessman, its endeavour and intention was to use business loans for business purposes and own funds for investments. In the given case, assessee had shown that loans raised were for specific business purposes. It had suo motu made a disallowance for direct interest expenditure under rule 8D(2)(i) for A.Y. 2010-11, while claiming that no such expenditure was there for A.Y. 2009-10. For application of Section 14A(2), it is necessary for the AO to show that he is not satisfied with the correctness of the claim of assessee with regard to the expenditure claimed to have been incurred for earning exempt income. That this condition applies even where the claim is one of no or nil expenditure has been held by the Hon'ble Delhi High Court in the case of Maxopp Investments Ltd. v. CIT, (2011 (11) TMI 267 - Delhi High Court). We are therefore of the opinion that ld. CIT(A) was justified in deleting the disallowances made under rule 8D(2)(ii). No interference is required. - Decided against revenue
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