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2019 (5) TMI 1119 - AT - Income TaxDisallowance of miscellaneous expenses - alleged that assessee failed to substantiate such claim by producing verifiable details - adhoc disallowance of 20% of the claim - HELD THAT:- It has to be kept in mind that if there is any deficiency in the vouchers or the bills supporting the incurrence of expenditure, then at the most the expenses to the extent that which are not supported by the vouchers can be regarded to be non-genuine and can be disallowed by the AO while computing the income of the assessee. AO has resorted to estimating the disallowance of the claim without resorting to the procedure prescribed in section 145(3) r.w.s 144. Therefore, the action of the AO is arbitrary in nature and therefore, adhoc disallowance cannot be allowed to sustain - Decided in favour of assessee Disallowance u/s 14A u/r 8D(2)(ii) - as contended assessee has made investment from own funds in securities which fetched exempt income and not from the interest bearing loan funds and therefore no disallowance was warranted u/s Rule 8D2(ii) - HELD THAT:- There is no allegation in the present case before us that the loan funds taken by the assessee from United Bank of India and the Tea Board of India has been utilized for any other business purpose other than for which it was sanctioned and since the loan funds has not been diverted for investment in securities, find force in arguments of the learned AR that no disallowance on account of Rule 8D(2)(ii) was warranted and therefore, we direct deletion of addition made by applying Rule 8D(2)(ii). - Decided in favour of assessee.
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