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2019 (8) TMI 978 - AT - Income TaxDisallowance u/s. 14A r.w. Rule 8D - sufficiency of own funds - HELD THAT:- Facts demonstrate that assessee company had sufficient own fund for making investment in the shares. After placing reliance on the decision for Mumbai High Court in the case of Reliance Utilities and Power [2009 (1) TMI 4 - BOMBAY HIGH COURT with regard to investment in tax free securities out of assessee’s own fund and considering the other judicial decisions referred by the assesssee, we are not inclined with the decision of ld. CIT(A) in sustaining the impugned addition made by the assessing officer without giving reason for its justification, therefore, we are of the view that no interest expenditure should be disallowed u/s. 14A r.w. rule 8D in the case of the assessee. Regarding administrative expenditure, we are of the view that no exempt income can be earned without incurring any administrative expenditure, therefore, we restore this issue of computing administrative expenditure incurred for earning exempt income to the file of assessing officer and direct the assessing officer to compute administrative expenditure @ 0.5% of investment from which the assessee has earned the tax free income. Therefore, the appeal of the assessee is partly allowed.
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