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2020 (11) TMI 213 - AT - Income TaxAccrual of income - Receipt of interest from the sundry debtors - Accrual of income - HELD THAT:- In view of block assessment order dated 28.02.2007, various investments were added as undisclosed income and since the assessee has not redeemed those investments, the AO considered the interest on those investments as accrued income. By reiterating the submissions as made before the ld. CIT(A), assessee has contended that the assessee has not received any interest from the sundry debtors and the assessee follows cash system of accounting due to uncertainty in the line of business. We find force in the arguments of Department has not placed on record any evidence of receipt of interest from the sundry debtors, as the burden lies on the Department. However, the AO estimated the accrued interest and treated it as income and brought to tax. Respectfully following the above findings of the Tribunal, CIT(A) directed the AO to follow the directions given by the ITAT in the case of Smt. Renu Sarin, wife of the Kartha of the assessee [2019 (4) TMI 1054 - ITAT CHENNAI]. We find no infirmity in the order passed by the ld. CIT(A). Accordingly, the common ground raised by the Revenue for both the assessment years stands dismissed. Disallowance u/s 14A - assessee has submitted that the assessee has not claimed any expenditure as deduction - HELD THAT:- The assessee is an individual and it appears that she has made the investment based on her own decision without any external or internal aid and from her own interest free funds. In such situation no expenditure could be attributed for making such investment. Moreover there is nothing on record to suggest that the assessee have claimed any expenditure as deduction. When the assessee has not claimed any expenditure there could not have be any expenditure that is attributable towards earning exempt income. Therefore we are of the considered view that no disallowance can be made U/s. 14A of the Act or by invoking Rule 8D of the Rules in the case of the assessee. Hence we hereby direct the Ld. AO to delete the addition made in the hands of the assessee invoking the provisions of Section 14A. - Decided against revenue.
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