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2018 (7) TMI 2272 - ITAT AHMEDABADDisallowance u/s 14A r.w.r. 8D - 'interest' paid on term loans is not attributable to any income or receipt laid down in Rule 8D(ii) - CIT-A deleted the disallowance - HELD THAT:- As it is beyond doubt that the own fund of the assessee exceeds the investment as discussed above. Therefore, given above, we conclude that there is no question of making the disallowance on account of interest expenses under Rule 8D (2)(ii) in the given facts and circumstances. Thus the ground of appeal of the Revenue is dismissed. Disallowance of expenditure in relation to dividend income - There was investment in mutual funds which has been sold during the year. Similarly, the investment has been made by the assessee in the mutual fund. Therefore, the plea of the assessee that it has not spent any time and energy on such investment does not appear to be correct. It is because the top management is certainly involved in the process of purchase and sale of investment.Therefore, we hold that the AO has rightly invoked the provision of Rule 8D for making the disallowance of expenditure in relation to dividend income.Thus, we are of the view that the disallowances made by the AO and subsequently confirmed by the Ld. CIT(A) are as per Rule 8D(2)(iii) of Income Tax Rule. Disallowance u/s 14A determining the profit u/s.115JB - assessee before the ld. CIT(A) submitted that the disallowances made under the provisions of Section 14A of the Act could not be applied while determining the profit u/s 115JB - HELD THAT:- We hold that the disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction of CIT Vs. Jayshree Tea Industries Ltd. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] - AO needs to work out the disallowances in terms of the clause (f) to Explanation-1 of Sec. 115JB of the Act independently after considering the expenses debited in the profit & loss account as mandated under the provisions of law. Therefore we are inclined to restore this issue to the file of AO for fresh adjudication by law and in the light of above discussion. Thus this ground of CO the assessee is allowed for statistical purposes.
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