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2019 (5) TMI 1050 - ITAT MUMBAIDisallowance u/s 14A r.w.r. 8D(2)(iii) - HELD THAT:- Disallowance u/s 14A read with rule 8D can not exceed the amount of exempt income as has been held in the case of Pr. CIT vs. Ballarpur Industries in [2016 (10) TMI 1039 - BOMBAY HIGH COURT] wherein it has been held that the disallowance can not exceed the amount of exempt income. Accordingly, we direct the AO to restrict the disallowance under section 14A read with rule 8D(iii) . MAT computation - Disallowance made u/s 14A read with rule 8D to the book profit the same has been decided by the Special Bench in the case of ACIT vs. Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that while computing the book profit under clause (f) of Explanation 1 to section 115JB no addition can be made in respect of disallowance under section 14A read with rule 8D. Accordingly, we direct the AO to delete the disallowance while computing the book profit. The appeal of the assessee is allowed. Disallowance under rule 8D2(ii) - assessee’s own interest free funds were more than the investment made - HELD THAT:- CIT(A) has deleted the disallowance by following the decision in the case of CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] on the ground that assessee’s surplus funds were more than the investments in the shares. Therefore, we do not find any infirmity in the order of Ld. CIT(A) and accordingly the same is upheld by dismissing the appeal of the Revenue.
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