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2015 (2) TMI 481 - AT - Income TaxDisallowance u/s 14A - whether amount invested in securities were not out of borrowed funds - Held that:- In view of the fact that specific term loans were obtained for specific assets and investment in net working capital was much more than working capital limit, it can be said that no borrowed funds were used for making investment and therefore disallowance of interest u/s 14A was not justified. The incurring of short term loss from mutual funds and earning from long term capital gains on shares proves that assessee was continuously engaged in investment activities both short term and long term which cannot be done without proper human resources and proper infrastructure. Therefore, we are of the considered opinion that the Assessing Officer had rightly disallowed 0.5% of expenditure as disallowance u/s 14A of the Act. In view of the above, we restrict the disallowance to the extent of ₹ 5,64,016/- and delete the addition of ₹ 18,39,156/- on account of disallowance of interest u/s 14A of the Act. - Decided partly in favour of assessee
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