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2021 (2) TMI 1166 - AT - Income TaxAddition u/s 14A r.w.r. 8D - assessee had invested in equity shares in its sister concerns out of its non-interest bearing funds such as its equity share capital and reserves - CIT (A) deleted the addition by holding that since the assessee had made the entire investment out of its non-interest-bearing fund, no interest expenditure can be attributed for making the investment which is justifiable and appropriate.HELD THAT:- In the case of the assessee the assessee company has utilised only its non-interest-bearing funds for making investment in its own subsidiary company, no interest cost can be attributable to the same because, there is no interest cost to the assessee, as it can be treated that the assessee has withdrawn from its capital and reserves which are assessee’s interest free funds for making such investment. For making investment in its own company there cannot be any cost attributable with respect to direct and indirect expenses towards the process of decision making, due diligence, managerial expenditure and portfolio management expenditure because no such cost can arise for making investment in one’s own entity. Only meagre expenses can be attributable with respect to clerical and stationary expenses which is negligible and that is deserved to be ignored. Factually there cannot be any expenditure attributable to the investment made in sister company when the investment is out of its own interest free fund. When the above facts were pointed out to the Ld. DR, he could not controvert to the same however, he relied on the order of the Ld. AO. Order of the ld. CIT (A) deleting the disallowance of expenditure made by the Ld. AO invoking the provisions of section 14A of the Act read with Rule 8D of the Rules does not call for interference. Hence, we hereby confirm the order of the Ld. CIT (A) on this issue. - Decided against revenue.
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