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2014 (4) TMI 1081 - AT - Income TaxDisallowance u/s 14A - Held that:- Find force in the contention of assessee that the interest has been wrongly taken as the assessee has sufficient interest-free funds available, hence the addition made on account of interest amounting to ₹ 1,37,060/- is hereby directed to be deleted. In respect of the disallowance towards administrative expenses, since both the authorities below have not given finding as to whether the ½% of average investment is of those investments wherefrom the assessee has earned exempt income. As per the provision of Rule 8D, it is only the average of the value of the investment from which the income has been earned which is not falling within the part of total income that is to be considered. Thus, it is not the total investment at the beginning of the year and at the end of year which is to be considered but it is the average of the value of the investment which has given rise to the income which does not form part of total income is to be considered. Hence, the issue is restored back to the file of AO to verify as to how much investment was made during the year on which the assessee has earned exempt income and, accordingly, re-compute the disallowance under Rule 8D of the Income Tax Rules, 1962. - Decided in favour of assessee for statistical purposes.
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