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2012 (7) TMI 276 - AT - Income TaxJustification on restricting the addition u/s 14A - AO applied Rule 8D in order to disallow interest expenditure relatable to the investments - Held that:- For AY 2007-08 which is under consideration provisions of Rule 8D are not applicable and held that prior to Rule 8D the AO was bound to examine the application of sec. 14A(2)as decided in GODREJ AND BOYCE MFG. CO. LTD. Versus DCIT AND ANOTHER [2010 (8) TMI 77 (HC)] - CIT(A) has agreed with the contention of the assessee without examining the case whether out of Rs.31.5 crores only expenditure of Rs.2 crore was out of borrowed funds. Since the CIT(A) has not examined the issue and has accepted the contention of the assessee without verification it is proper to set aside the issue to the file of the AO with the directions to examine the issue afresh - in favour of revenue.
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