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2016 (2) TMI 1187 - AT - Income TaxDisallowance u/s 14A applying rule 8D - Held that:- It is admitted by ld. AO himself that the investments in JV equity and mutual funds was made by the assessee out of own capital and reserves. The disallowance is made not on consideration of assessee’s reply and merits of its contention but merely by mechanically applying rule 8D. These unambiguous observations on the part of AO clearly clinch the issue in favor of the assessee. Without prejudice to above in AY 2011-12, assessee earned dividend of only to the extent of ₹ 1,19,645/- whereas ₹ 59,01,52,708 has been disallowed u/s 14A by mechanical application of rule. In view of above judgments even in worst circumstances and if assessee’s all explanation fail, disallowance u/s 14A can never exceed the exempt income. In AY 2011-12 also ld. AO has admitted the acquisition of JV shares and mutual funds from the same interest free own sources i.e. capital and reserves of company. Contribution to Employees PF - payments made by the assessee within the due date prescribed for filing the return - Held that:- The issue in question is squarely covered by Hon’ble Rajasthan High Court judgment in the case of CIT V. SBBJ [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] which has been relied by ld. CIT(A). Respectfully following Hon’ble Rajasthan High court judgment this ground is dismissed.
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