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2017 (8) TMI 1616 - AT - Income TaxDisallowance u/s 14A read with rule 8D(iii) - investment in the subsidiary domestic Company - CIT-A deleted the addition - HELD THAT:- Assessee has come up with specific argument that it has not incurred any interest cost for earning exempt income but this plea of the assessee has also been brushed aside by the AO without recording any reason of dis-satisfaction. When it is admitted fact that the assessee has not incurred any interest expenses during the year under assessment and it was having ample cost free funds to invest in its subsidiaries for commercial expediency, the question of disallowance under Rule 8D does not arise - also not in dispute that the income derived by the assessee company from the investment made in its subsidiary is otherwise taxable. When assessee has not utilized any borrowed fund for investment nor made any interest payment nor earned any dividend, there is no question of making disallowance by the AO u/s 14A read with Rule 8D of the Rules. CIT (A), by considering all these facts, has rightly deleted the addition.- Decided against Revenue.
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