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2012 (7) TMI 342 - AT - Income TaxAddition made on account of dividend income - claimed as exempt in terms of sec. 10(34) - CIT(A) deleted the addition - Held that:- As the assessee has invested in mutual funds during the previous year under consideration and the Revenue could not produce any evidence contrary to the findings recorded by the CIT(A) no infirmity is found in the order passed by the CIT(A) deleting the addition - in favour of assessee. Restricting the disallowance u/s 14A by CIT(A) - Held that:- The assessee had paid interest of Rs.17,16,952/- out of which the AO had disallowed Rs.16,92,466/-. Therefore, u/s 14A disallowance of balance interest of Rs.24,486/- (Rs.17,16,952 – 16,92,466) can be allowed. The AO has made separate disallowance of Rs.16,92,466/- on account of interest free advances given to the sister concerns. Therefore, for the purpose of sec. 14A interest of Rs.16,92,466/- would not be considered and only remaining expense of Rs.24,486/- would be liable to be considered under sec. 14A,thus CIT(A) was justified in restricting the disallowance u/s 14A to the extent of Rs.24,486/- decided in favour of assessee.
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