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2016 (9) TMI 1635 - AT - Income TaxDisallowance u/s. 14A r.w.s Rule 8D(iii) - HELD THAT:- We find that this issue is squarely covered in favour of assessee in its own case for A.Y 2009-10 [2016 (3) TMI 873 - ITAT KOLKATA] disallowance U/S 14A read with Rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this income which does not form part of the total income. Addition u/s 14A r.w.r. 8D(2)(ii) on account of interest - HELD THAT:- We find that the entire investments were made long back by the assessee. We hold that the assessee was having sufficient own funds to make those investments in the earlier years. We hold that the Learned AO had not brought on record any nexus between the borrowed funds and the investment in shares of various companies - We also hold that the investments made in subsidiary companies are to be treated as strategic investments and hence the disallowance u/s 14A of the Act would not operate at all as the investment made thereon is not with an intention to earn any exempt income in the form of dividend but only for obtaining controlling interest in the said companies and to further the business interests of the assessee in the said company. Thus we hold that no disallowance of interest is required to be made under rule 8D(i) & 8D (ii) as no direct or indirect interest expenditure has incurred for making investments. Hence this ground of appeal of the Revenue is dismissed. Addition u/s 14A r.w.r. 8D(iii) to the book profit computed u/ s 115JB of the Act - HELD THAT:- While computing the "Book Profit" of the company under the provisions of section 115JB of the Act, any disallowance made under the normal provisions of the Act also cannot be given effect to for arriving at the "Book Profit" for the purpose of Section 115JB of the Act. Accordingly, this ground raised by the assessee is allowed in its favour.
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