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2015 (4) TMI 1311 - AT - Income TaxDisallowance of interest u/s 36(1)(iii) - HELD THAT:- As relying on own case [2013 (11) TMI 1599 - ITAT AHMEDABAD] While considering the claim u/s. 36(1)(iii) what is to be required to judge is whether the amount is borrowed for the purpose of business or not. Since the amount has been borrowed in earlier years as well as during the year at a stipulated rate of interest and which has been still utilized for the purpose of business, the interest rate could not have been re-negotiated for earlier year. Therefore, rate of interest, paid by the assessee is quite reasonable having regard to the fair market value of such services. Therefore, the CIT(A) was incorrect in restricting the interest payable to the extent of 15% or 14% which is supported by various decisions mentioned in the order in preceding paras. Since the interest rate paid by the assessee is reasonable, the order of the CIT(A) is reversed and addition is deleted. Thus, assessee’s appeals are allowed and Revenue’s appeals are dismissed on this ground. Disallowance u/s.14A - HELD THAT:- As relying on own case [2013 (11) TMI 1599 - ITAT AHMEDABAD] Tribunal has decided the issue in favour of assessee by placing reliance on the order of Co-ordinate Bench in case of Chudgar Ranchodlal Jethalal [2015 (4) TMI 437 - ITAT AHMEDABAD] for the proposition that disallowance u/s. 14A r.w. Rule 8D though is mandatory from A.Y. 2008-09 under no circumstances, should exceed quantum of exempt income. In view of above, Assessing Officer is directed to restrict the disallowance u/s. 14A r.w. Rule 8D should not exceed quantum of exempt income. As far as disallowance of administrative expenses is concerned, in absence of details of investments made during the year, number of transactions in those investments etc, this issue needs to be re-looked by Assessing Officer. So, in the interest of justice, we restore this issue to him with direction to decide in view of above discussion and in accordance with law after providing due opportunity of hearing to the assessee.
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