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2020 (10) TMI 1245 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Assessee submitted that interest expenditure incurred by the assessee should not have been disallowed under section 14A r.w. Rule 8D since no part of the borrowed funds were used by the assessee for making investments and prayed for deleting the disallowance of expenditure - HELD THAT:- AO mentioned in the assessment order that the assessee made a submission that the assessee is having capital account balance of ₹ 6,25,90,602/-, but the Assessing Officer has not appreciated the said facts and nothing was discussed in his order. Thus, we set aside the orders of the authorities below and remit the matter back to the file of the Assessing Officer with the direction that he shall examine the balance sheet of the assessee and ascertain as to whether as on the date of investment, the assessee has sufficient own funds or not. If the assessee is having own funds as on the date of investment, then the assessee is entitled to claim exemption and there is no need of disallowance under section 14A of the Act r.w. Rule 8D(2)(ii). Disallowance under Rule 8D(2)(iii) - Assessing Officer is directed to consider only those investments for computing average value of investment which yielded exempt income during the year under consideration as per Rule 8D(2)(iii) in view of the Delhi Special Bench of the Tribunal in the case of ACIT v. Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] and to pass detailed order on both counts. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
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