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2016 (1) TMI 539 - AT - Income TaxAllowability of exemption u/s 10(1) - Held that:- We are of the opinion that the CIT (A) has rightly adjudicated the issue in favour of the assessee following the binding judgment of the Hon'ble jurisdictional High Court in assessee's own case recording finding of the fact that the assessee in fact carried on agricultural operations and that the orders passed to that effect in assessment years 1990-91 to 1992-93 have been accepted by the Revenue. For earning agricultural income, it is not necessary that the assessee must own the land and it is enough if it is established that the agricultural organizations have been actually carried on by the assessee. In view of the finding of the fact recorded - Decided in favour of assessee. Disallowance u/s 14A r.w. Rule 8D of the Act instead of disallowing adhoc amount applying flat rate of 2% of the exempt income - Held that:- Assessee submitted that the law on this issue has under gone number of changes so for as the applicability of the provisions of section 14A read with Rule 8D is concerned. There is a need for examining the various aspects of the issue such as own funds v/s borrowed funds; dividend yielding investment v/s other strategic investments, the dividend income which is chargeable to tax otherwise etc. Therefore, he pleaded for remanding this issue also to the file of the AO for adjudication. We accordingly find merit in the said Ld Counsel's argument and direct the AO to examine and decide the issues raised after granting a reasonable opportunity of being heard to the assessee.
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