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2017 (8) TMI 1313 - AT - Income TaxDisallowance made u/s 14A - proof of sufficiency of own funds - Held that:- As primary argument advanced by the Ld. DR that netting principle of interest considered by the Ld. CIT(A) would become irrelevant as admittedly the assessee in the instant case has got sufficient own funds which is several times more than the investments made by her. These details are very much available in the order of the Ld. CIT(A) and had not been controverted by the Revenue before us. Hence, we hold that the Ld. CIT(A) had rightly deleted the disallowance made u/s 14A read with Rule 8D(2)(ii) of the Rules. With regard to disallowance made towards administrative expenses under Rule 8D(2)(iii), we find that the assessee on her own had disallowed a sum of ₹ 5 lacs in the return of income out of total administrative expenses of ₹ 40,73,576/-. AO had not given any satisfaction as to how the said disallowance made by the assessee is incorrect having regard to the accounts of the assessee in terms of Section 14A(2) read with Rule 8D(1) of the Rules. Thus without doing the same, the Ld.AO cannot mechanically resort to Rule 8D of the Rules and in the instant case, the disallowance made by the assessee in the sum of ₹ 5 lacs is reasonable having regard to the accounts of the assessee and accordingly, the Ld. CIT(A) had rightly deleted the further disallowance made by the Ld. AO in this regard. - Decided against revenue
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