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2019 (7) TMI 1545 - AT - Income TaxDisallowance u/s 14A r/w/Rule 8D(2)(iii) - HELD THAT:- Application of sec. 14A is not automatic and it inheres in it the concept of reasonableness AO in the instant case is not found to have satisfied himself about incurring of any administrative expenses. The partnership firm is an independent entity and requires to run its affairs separately. The partners are holding the mutual agency in the partnership firm and unless the partners are shown to be drawing remuneration from the assessee concern and at the same time investing its attention in the partnership firm, there is no perceptible reason to disbelieve the assessee for not incurring in expenditure. We, thus, find no reason to thrust mechanical application of Rule 8D(2)(iii) of the Act in the given facts. The order of the CIT(A) is consequently set aside and the AO is directed to reverse the disallowance made in Rule 8D(2)(iii) r.w.s 14A of the Act. - Appeal of the assessee is accordingly allowed exparte.
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