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2016 (3) TMI 142 - AT - Income TaxDisallowance u/s 14A - Held that:- DR has not controverted the fact that the assessee has not received any exempted income during the year under consideration. In view of the judgment of the Hon'ble Jurisdictional High Court in the case of Cheminvest Ltd Vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT ] and in the case of CIT Vs. Holcim India Pvt Ltd [2014] (9) TMI 434 [Del] wherein it has been held that no disallowance u/s 14A of the Act can be made in a year in which no exempt income has been earned or received by the assessee, we concur with the ld. AR submissions. We also agree with the contention of the ld. AR that without establishing any nexus between the expenditure incurred and investment, Rule 8D cannot be invoked. - Decided in favour of assessee Disallowance of interest - Held that:- We note that the interest free advances given to six companies during F.Y. 2006-07 pertained to A.Y 2007-08. When the assessee’s company established that no interest bearing funds were utilised for these impugned interest free advances, then disallowance can be held as sustainable. When the CIT(A) himself has recorded a finding of fact at Pg 8/9 of the order that amounts advanced to six companies was out of internal accruals/ redemption of Mutual Funds and not out of Borrowed funds, we do not find any valid reason to interfere with his finding in the absence of any material brought on record by the ld. DR to contradict the same. - Decided in favour of assessee
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