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2014 (2) TMI 843 - ITAT MUMBAIReduction in capital advances given to suppliers - Acquisition of land from Capital-Work-in- Progress – Held that:- The assessee has merely given the advances to the suppliers/contactors/sellers and the expenses have not been actually incurred - Nor any bills have been raised by the persons to whom the advances have been made – the CIT(A) has rightly held that the said advances given by assessee towards expenditure that may arise or may arise in future cannot be said to be capital in nature -there is no confirmation regarding expenditure incurred or to be incurred by assessee – Decided against Assessee. Disallowance u/s 14A r.w Rule 8D of the Act – Held that:- The contention of the assessee has merits that no borrowed funds were used by assessee for making the said investment - the borrowed money was taken by assessee from IDFC as secured loan which the assessee could utilized only for setting up hotel project – the disallowances of out of interest is not justified - AO has made disallowance of expenses as per Rule 8D(iii) of the Rules, the formula prescribed by Legislature which is applicable from assessment year under consideration - there is no arbitrarily disallowance, made by AO but has followed the statutory formula to make the disallowance towards attributable administrative expenses – there is no need to interfere in the decision of CIT(A) in confirming the disallowance – Decided partly in favour of Assessee.
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