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2019 (6) TMI 703 - AT - Income TaxDisallowance u/s 14A - sufficiency of own funds - HELD THAT:- The value of investments held by the assessee as at the beginning and end of the year was 2.60 crores and 10 lakhs respectively. Admittedly the own funds available with the assessee is more than value of investments and hence as per the decision rendered in the case of HDFC Bank Ltd. [2016 (3) TMI 755 - BOMBAY HIGH COURT] no disallowance out of interest expenditure is called for. Accordingly we set aside the order passed by the CIT(A) on this issue and direct the AO to delete the disallowance made in Rule 8D(2)(ii) out of interest expenditure. We notice that the assessee has held units in ICICI prudential Liquid fund to the tune of 2.60 crores as at the beginning of the year and the same has been sold during the year under consideration. Further, during the year under consideration, the assessee has also made fresh investment of 10 lakhs in its subsidiary named M/s Clinigene International Ltd. The assessee has also received dividend income of 114.95 crores during the year under consideration. Thus, we notice that there has been certain amount of activities in the investment portfolio of the assessee. The above said activities, could not have been undertaken without using the establishment of the assessee. Not be practicable to apply provision of Rule 8D(2)(iii) but at the same time some disallowance is called for out of administrative expenses for the reasons mentioned above. Accordingly, a disallowance of ₹ 10,000/- out of administrative expenses may be estimated to take care of provisions of Section 14A and the same would put this issue at rest. We direct the AO to make disallowance of ₹ 10,000/- out of administrative expenses u/s 14A. Appeal filed by the assessee is partly allowed.
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