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2016 (12) TMI 54 - AT - Income TaxAddition u/s 14A read with Rule 8D(2)(ii) - Held that:- In the instant case before us, interest amount other than interest on term loans works to be ₹ 23 lakhs i.e., (45.32 crores – 45.09 crores). However, the interest incurred on the loan taken from bank is to be considered u/s.36(1)(iii) and since it is not incurred for earning exempt income, the same cannot be disallowed u/s.14A read with Rule 8D(2)(ii). As per the working of CIT(A), such disallowance of interest works out to be ₹ 26,64,777/-. However, nothing was brought on record to controvert the findings of CIT(A). Accordingly, we confirm the action of CIT(A) for restricting the disallowance of interest under Rule 8D(2)(ii) to the extent of ₹ 26,64,777/-. For disallowance warranted under Rule 8D(2)(iii) it is clear from the working that after excluding the long term strategic investment and investment not yielding dividend income there remains to be ‘nil’ investment on which disallowance under Rule 8D(2)(iii) can be applied. Applying the proposition of law as cited by Ld. A.R. and referred by us in para 8 to the facts of instance case, we found that no disallowance is warranted under Rule 8D(2)(iii), in so far as after excluding such investment there remains to be nil investment. However, keeping in view the working given by the assessee, we restrict the disallowance to the extent of ₹ 14,79,411/-. Addition made on account of provision for wealth tax for MAT calculation - Held that:- Issue is squarely covered by the decision of Jurisdictional High Court in case of Echjay Forgings Pvt. Ltd. [2001 (2) TMI 56 - BOMBAY High Court]. Respectfully following the same, we do not find any infirmity in the order of CIT(A) for deleting the addition made on account of provision of wealth tax while computing book profit u/s.115JB of the IT Act.
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