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2015 (10) TMI 1862 - AT - Income TaxDisallowance under S.14A read with Rule 8D - expenditure incurred towards earning of exempt income - whether the CIT(A) is correct in directing that the assessee will not be entitled to capitalize the amount of ₹ 2,41,51,811 in future and also will not be eligible for depreciation on such amount - Held that:- once the expenditure claimed is disallowed, the same cannot be capitalized by the assessee. Therefore, we do not see any serious infirmity in the irections of learned CIT(A) in this regard. However, it is seen from the record that the expenditure shown by the assessee in the balance sheet under the head ‘Applications of Fund’ is after reduction of the shown of ₹ 75,49,010. Therefore, expenditure disallowed under 14A read with Rule 8D which cannot be capitalized must be reduced by that amount. In the aforesaid facts and circumstances, we modify the order of the learned CIT(A) by directing the Assessing Officer to requantify the amount to be disallowed by taking into consideration income shown by the assessee of ₹ 75,49,010. The assessee’s appeal is accordingly allowed to that extent - Decided partly in favour of assessee.
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