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2016 (9) TMI 1624 - ITAT MUMBAIDisallowance u/s 14A read with rule 8D - HELD THAT:- We find that the assessee has made total investment of which was invested in the shares of group company M/s Kilitch Drugs (India) Ltd in the earlier years. We also find merit in the argument of the ld. AR that the interest disallowance as confirmed by the ld. CIT(A) was wrong as no borrowed funds were used for the investments in shares as amount raised were for specific purposes and loans were used accordingly. We also find from assessee’s own funds whereas the investments in the shares were only ₹ 10,88,643/-. From the said facts it is clear that these investments in the shares was made out of own funds and not from the borrowed funds. We also find merit in the submissions of the ld AR that the investments in group company were made for strategic purposes and to which provisions of s. 14A r.w.8D cannot be applied. In view of facts discussed above we are of the considered view that order of CIT(A) is wrong to that extent and accordingly we set aside the order of ld. CIT(A) and direct the AO to delete the addition to the extent thus sustaining disallowance to the extant of ₹ 77,311/-. Accordingly, the appeal of the assessee is partly allowed.
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