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2014 (9) TMI 996 - AT - Income TaxDisallowance u/s 14A - CIT(A) deleted the addition - Held that:- Exempt income of assessee comprised of interest on tax paid, relief bonds accrued and PPF interest for which journal entries were passed at the end of the year and dividend income was credited in the bank through ECS, hence, no expenditure incurred were referable and relatable to the exempt income. The ld. CIT(A) further observed that the A.O. has also not given any finding as to whether the assessee has made a claim of expenditure in relation to exempt income and the claim is not correct. The categorical finding has been recorded by the ld. CIT(A) to the effect that the assessee has earned dividend income of ₹ 10,245/- which has been directly credited to the bank through ECS. The interest of ₹ 69,901/- received on PPF, for which a journal entry was passed on 31-3-09 and similarly interest of ₹ 66,02,652/- on tax free bonds is credited by journal entries passed on 31-3-09. Thus, no expenditure has been incurred for earning exempt income. From the records, we also find that the expenditure mentioned by the A.O. was in relation to the professional income earned by the assessee which is taxable under the Income Tax Act, there is no reason to disallow the expenses incurred for earning the taxable income. The findings so recorded by the ld. CIT(A)has not been controverted by the Department by bringing any positive material on record. Accordingly, we do not find any reason or infirmity with the order of the ld. CIT(A) in deleting the disallowance made by the A.O. u/s 14-A of the Act - Decided in favour of assessee
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