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2017 (5) TMI 1812 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - expenditure incurred on earning exempt income - HELD THAT:- AO while computing the disallowance has taken into consideration both investments related to exempt income as well as taxable income. Under these facts in our considered view, AO was not justified in making the disallowance by invoking provision section 14A. The mandate of the section 14A(2) is that the AO shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income but in the given case the AO has not restricted itself to the exempt income also considered the taxable income, while computing the disallowance. The AO failed to give a clear finding in respect of the submissions of the assessee that the investment was made out of interest free fund. CIT(A) demonstrated from the accounts of the assessee that the assessee was having sufficient on interest free fund for making such investment. Therefore, we do not see any reason to interfere into the order of the Ld. CIT(A), same is hereby affirm. The ground of the Revenue’s appeal is dismissed.
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