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2015 (6) TMI 329 - HC - Income TaxDisallowance under Section 14A read with Rule 8D - ITAT deleted disallowance influenced by the fact that the assessee had not applied any borrowed fund towards the investment that yield exemption income - Held that:- The AO's initially determined disallowance to the extent of ₹ 75,41,105/- as against the tax exemption income earned by the assessee of ₹ 25,77,300/-, was finally incorrect and excessive. It is based on misapplication of Rule 8D(2)(ii). The CIT(Appeal), to certain extent dealt with that misapplication but the fact remains that the tax exempt income of ₹ 25 lakhs was in effect brought to tax by disallowance of ₹ 37 lakhs. Moreover, the relevant component of the expenditure was on account of the interest paid by the assessee. The ITAT after examining the records has returned a clear finding that no interest element could be attributed to the earning of exempt income. No substantial question of law arises. - Decided against revenue.
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