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2016 (10) TMI 986 - AT - Income TaxDisallowance u/s 14A - computation of amount - Held that:- When the assessee has come up with a categoric plea that there is no increase in investment during the year under assessment and has not incurred any expenditure, the question of resorting to estimation by the AO does not arise particularly when AO has neither disputed the audited books of account maintained by the assessee in respect of investment and dividend income nor AO has recorded his dis-satisfaction as to how any expenditure has not been incurred by the assessee in maintaining the investment. In the given circumstance, the disallowance u/s 14A cannot exceed the amount of ₹ 28,666/- already claimed exempt u/s 10(34). CIT (A) has also failed to appreciate the arguments addressed by the assessee that when no fresh investment has been made by the assessee during the year under assessment nor it has incurred any expenditure the question of invoking provisions contained under section 14A read with Rule 8D does not arise. Disallowance of interest - loans were utilized for non-business activities - Held that:- The complete nexus has been established between the funds borrowed and fund parked in the FDRs to be utilized for business purpose at the time of opportune time. So, in these circumstances, the revenue authority was not justified in disallowing the interest claimed by the assessee both in AY 2008-09 and AY 2009-10. - Decided in favour of assessee
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