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2013 (12) TMI 1577 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - Held that:- Inter-corporate deposits cannot be treated as a loan falling within the purview of section 2(22)(e) of the Act. In view of the decision taken by the coordinate Bench that intercorporate deposits received cannot be considered as a loan or advance so as to visit an assessee with the hazards of section 2(22)(e) of the Act, Ld. CIT(Appeals) was in our opinion justified in deleting the addition Disallowance under section 14A - Held that:- CIT(Appeals) after verifying the cash flow statement came to a conclusion that loans raised were not used by the assessee for the purpose of any investment earning dividend income claimed as exempt. Disallowance of interest as stipulated in sub-clause (ii) of clause (2) of Rule 8D can be done only when an assessee has incurred expenditure by way of interest which is not directly attributable to any particular income or receipt. Ld. CIT(Appeals) had given a clear finding after verifying the cash-show that the loan amounts were not used for any investment resulting in the dividend income. Nothing has been brought on record by the Revenue to show that the finding of ld. CIT(Appeals) is not according to facts. We are therefore not inclined to interfere with the order of ld. CIT(Appeals)
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