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2016 (6) TMI 202 - AT - Income TaxDisallowance made under Section 14A - Held that:- When the Assessing Officer has not expressed or recorded any satisfaction by identifying the expenditure which has been incurred by the assessee for earning the dividend income the disallowance under Section 14A on account of indirect expenditure is not sustainable and the same is disallowed. Disallowance of interest in respect of work-in-progress - Held that:- In view of the contention of the learned Authorised Representative that the assessee is having its own fund sufficient for the expenditure incurred being part of the work-in-progress, we are of the considered opinion that this is a factual aspect of the matter and requires a proper examination and verification. Accordingly, we set aside this issue to the record of the Assessing Officer for limited purpose of verification of availability of non-interest bearing fund with the assessee and thereafter the Assessing Officer has to adjudicate the issue in accordance with the above observations. Disallowance of interest on account of interest free advances given to related parties - Held that:- The assessee was having its own fund which was sufficient for this additional investment in the sister concern. Therefore, we do not find any error or illegality in the order of CIT (Appeals) in deleting the disallowance made by the Assessing Officer on account of interest expenditure under Section 14A. Disallowance of interest in respect of capitalization of work-in-progress - Held that:- It clear from the finding of the CIT (Appeals) that the interest rate of 11% as calculated by considering all the relevant amounts of loan and interest. Therefore, in the absence of any contrary fact brought before us, we do not find any reason to interfere with the finding of the CIT (Appeals) on this issue.
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