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2013 (9) TMI 82 - AT - Income TaxDisallowance u/s 14A read with Rule 8D – Held that:- There was availability of sufficient own funds to make investments - Loan raised by IFCI are utilized in acquiring fixed assets and working capital/Packing credit/bill discounting facilities raised by the appellant from other banking institutions are being utilized towards working capital requirements (as evident from the monthly stock statements filed with the banking authorities) - AO is not correct in adding a sum of Rs.69,58,866 under section 14A read with Rule 8 on account of proportionate interest disallowing - However with regard to the disallowance of Rs.9,37,500 on account of administrative and other charges, since from assessment year 2008- 09, the applicability of Rule 8D is mandatory, accordingly by applying the formula of 0.5% on the average investment (Rs.18,75,00,000), a disallowance of Rs.9,37,500 stands confirmed
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