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2020 (2) TMI 1647 - ITAT DELHIDisallowance u/s 14A r.w. Rule 8D Disallowance of proportionate interest (out of interest on Working Capital Loan) - HELD THAT:- As the assessee is already having its own surplus fund much more than the investment made and it can be presumed that investments have been made out of own funds and there is no need of making any Disallowance of expenditure in respect of interest. Thus the allocation of interest is not warranted and the Disallowance deserves to be deleted. Disallowance of proportionate interest (out of interest on Working Capital Loan) - Rule 8D is not mandatory, the Assessing Officer must record his satisfaction that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure for cogent reasons. Satisfaction of the Assessing Officer has to be arrived at, having regard to the accounts of the assessed as enunciated in the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] and Godrej Boyce v DCIT [2017 (5) TMI 403 - SUPREME COURT] From the records or from the arguments of the ld. DR, we find that the invocation of sub-Section (2) of Section 14A is conspicuously absent and hence re-computation of the Disallowance is not legally valid. And considering the investments in mutual funds and in shares are through PMS, hardly any expense is incurred. As such the estimated Disallowance made by assessee suo moto is reasonable as it meets the expenses on account of STT as well as in direct expenses. Hence, we hereby hold that no additional Disallowance is called for by invoking Rule 8D. - Decided in favour of assessee.
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