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2017 (9) TMI 166 - HC - Income TaxAddition u/s 14A - interest paid on the borrowed funds utilized for making investment in shares yielding exempt income - Addition made on account of purported management/administrative expenses and other costs attributed towards earning dividend income - ITAT deleted additions - Held that - A perusal of the impugned order passed by the ITAT reveals that both the disallowances were made by the AO on ad hoc basis. The ITAT relied on the order passed earlier by a coordinate Bench of the ITAT for AY 2000- 2001 deciding an identical issue in favour of the Assessee. The ITAT noted that there was no change in the facts and circumstances or the legal position requiring a different view to be taken. In any event the Court finds that the disallowances were made by the AO on ad hoc basis. As explained by this Court in CIT v. State Trading Corporation Ltd. 2012 (8) TMI 1092 - DELHI HIGH COURT even prior to Rule 8D the disallowance under Section 14 A of the Act had to be on some reasonable basis. - Decided in favour of assessee.
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