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2012 (6) TMI 567 - AT - Income TaxDisallowance u/s 14A Act r.w.r. 8D of the Rules - the assessee submitted that no expenditure was incurred in relation to the investments in question – Held that:- Determining the amount disallowable as per provisions of Rule 8D(2) the condition precedent is that the AO must come to a conclusion having regard to the accounts of the assessee that claim of the assessee that no expenditure was incurred in relation to exempt income is not correct – as no such satisfaction has been arrived at, computation of disallowable amount as per Rule 8D(2) cannot be sustained - in CIT Vs. Hero Cycles Ltd. [2009 (11) TMI 33 (HC)]held that disallowance u/s 14A requires a finding of incurring of expenditure where it is found that for earning exempt income, no expenditure has been incurred, disallowance u/s 14A cannot be sustained – in favour of assessee.
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