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2014 (7) TMI 763 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D of the Rules – Held that:- The decision in M/s. IL & FS Financial Services Ltd. Versus Addl. Commissioner of Income Tax Circle–10(1), Mumbai [2014 (7) TMI 503 - ITAT MUMBAI] followed - The AO has worked out the disallowance u/s 14A as per rule 8D after taking interest cost and administrative cost - the assessee’s net worth and availability of funds is far more than investment which are capable of yielding exempt income - no interest cost should be attributed for working out the disallowance - If the assessee has huge funds which also consist of interest free funds, then resumption would be that investments have been made out of interest free funds, available with the assessee - interest cost cannot be made attributable - availability of interest free funds and investments which ore capable of yielding exempt income has not been examined properly either by the AO or by the CIT(A) – Relying upon The Commissioner of Income Tax Versus Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - the AO is directed to re-examine the nexus of inter interest free funds and investment made – Decided partly in favour of Assessee. Addition on the ground of mismatch of ITS details – Held that:- FAA has already given substantial relief to the assessee on production of confirmations - assessee had not produced any evidence from remaining two parties - no evidence has been filed assessee was aware of the mismatch from the date of assessment but till date it has not been reconcile the remaining two items - matter should not be sent back to the AO - Had the assessee produced the same kind of evidence, it would have definitely remitted back the matter for verification – the order of the FAA is upheld – Decided against Assessee.
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