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2019 (7) TMI 1493 - ITAT AHMEDABADDisallowance expenses u/s 14A - disallowance of interest expenses deleted by the CIT(A) but, estimated administrative expenses retained in terms of Rule 8D(2)(iii) - HELD THAT:- We straightway notice that exempt income is out of investments in mutual funds. The Co-ordinate Bench in Academy for Computer Training [2016 (11) TMI 1527 - ITAT AHMEDABAD] has taken a view that separate disallowances towards administrative expenses is not called for where exempt income is generated from mutual funds. It was held that in the case of a mutual funds, administrative and managerial expenses are factored in the investments itself. In such a scenario, the explanation offered by the assessee of no expenditure incurred appears to be in congruity with the market practice. Accordingly, we do not find it a fit case for resorting to double disallowance of the similar expenditure in the garb of Rule 8D(2)(iii) of the IT Rules. In consonance with the view also taken on the subject, we find merit in the plea taken by the assessee for deletion of disallowance. The order of the CIT(A) is thus set-aside and the AO is directed to delete the disallowance made towards administrative expenses under s. 14A r.w.r 8D(2)(iii) of the Rules - cross objection of the assessee is allowed.
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