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2014 (11) TMI 640 - AT - Income TaxDisallowance of interest made u/s 14A r.w. Rule 8(2)(iii) - investments in the form of shares in various companies and in a partnership firm Held that:- The assessee had no exempt income during both the years involved in CIT Versus M/s. Delite Enterprises [2009 (2) TMI 498 - BOMBAY HIGH COURT] it has been held that the AO was not correct in applying section 14A of the IT Act in disallowing the expenditure on account of interest - It was incumbent on the AO to establish a nexus between the expenditure incurred and the income which was exempt under the Act - unless and until, there is receipt of exempted income for the concerned assessment years, Section 14A of the Act cannot be invoked - the revenue has not dispelled the contention of the assessee before AO that it was not in receipt of any exempt income - the AO has erred in invoking Section 14A of the Act Decided in favour of assessee.
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