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2013 (6) TMI 223 - HC - Income TaxDisallowance of interest expenditure u/s. 14A - part deletion by ITAT - Held that:- Tribunal has committed no error. Basically the entire disallowance has been made on the basis of facts emerging on record. The Tribunal also relied on the decision of CIT v. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] wherein ITAT have given a clear finding that the assessee had interest free funds of its own & as AO had, without giving a finding as to how much administrative expenditure have been incurred to earn the exempt income, had made disallowance. In the earlier years also, similar position obtained. That being the fact, no question of law arises.In favour of assessee Compensation paid to property owner - whether a revenue expenditure incurred for business when it was compensation for non-occupation and a capital loss in nature - Held that:- The transaction in respect of which the compensation was paid arose during the course of business and was for the purpose of business. The expense has been incurred by the assessee to protect its interest and in lieu of the claims that could have been raised by the landlord. The incurring of expenditure has not been doubted by the Revenue. The Apex Court in case of J.K. Wollen v. CIT [1968 (8) TMI 15 - SUPREME Court] has held that in applying the test of commercial expediency for determining whether an expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not of the IT Department. In favour of assessee.
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