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2022 (7) TMI 811 - ITAT AHMEDABADDisallowance u/s 14A r.w.r 8D - Whether interest bearing funds was not invested by assessee ? - HELD THAT:- In case of Gujarat Fluoro chemicals Ltd.[2020 (10) TMI 252 - GUJARAT HIGH COURT] reiterated that where interest free funds available with assessee were far more than gross investment, it could safely be harboured that interest bearing funds was not invested by assessee and, thus, no disallowance under section 14A to be made. In view of the consistent position taken by the Gujarat High Court, as applied to the facts instant case, in our considered view, no disallowance is called for in respect of interest expenses under section 14A of the Act, when the assessee is having sufficient interest-free funds at its disposal in excess of investment made in instruments yielding exempt income. So far as administrative expenses it is not acceptable to simply state that no administrative expenditure was incurred to earn the above exempt income. The disallowance of administrative expenditure under section 14A of the Act was again affirmed by the Mumbai ITAT in the case of Zee Entertainment Enterprises Ltd.[2017 (5) TMI 719 - ITAT MUMBAI]. The Ahmedabad in the case of Sun Pharmaceutical Industries Ltd.[2017 (6) TMI 1323 - ITAT AHMEDABAD] directed the A.O. to compute the disallowance for administrative expenditure as per the formula given under Rule 8D. Thus we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming disallowance in respect of administrative expenses as per the formula given under Rule 8D. - Assessee appeal is partly allowed.
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