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2021 (3) TMI 624 - AT - Income TaxDisallowance u/s. 14A r.w Rule 8D(2)(i) and 8D(2)(ii) - AO held that he was not satisfied with the explanation given by the assessee and was not satisfied with the correctness of the claim made by the assessee - HELD THAT:- AO stated that direct expenditure relatable to earning of exempt income as per appendix 4(b) of the Tax Audit Report is ₹ 1,60,950/-. This quantum of disallowance was challenged by the assessee under Rule 8D(2)(i) of the I.T Rules. Smt. Priyanka Salapuria, Ld. Counsel for the assessee has submitted that the Ld. AO made this disallowance without any calculation and without any basis. On an examination of facts, we find that the Ld. AO made the disallowance, based on Tax Audit Report. Thus, we uphold the order of the Ld. CIT(A) on this issue and dismiss ground no. 2(a) of assessee’s appeal. Net interest expenditure should be considered while calculating the disallowance made under Rule 8D(2)(ii) of the I.T Rules, 1962 - Assessee has not submitted any calculation or other information in support of this ground. The Ld. AO at page-3 held that interest on borrowing obtained for specific purposes is deleted from the total interest expenses of the assessee and only the balance is disallowed under Rule 8D(2)(ii). In the absence of any cogent material filed by the assessee, we uphold the order of the Ld. CIT(A) on this issue and dismiss ground no. 2(b) of assessee’s appeal. Disallowance u/s 43B on Leave Encashment - HELD THAT:- Ground of assessee’s appeal has to be rejected as this issue has been adjudicated by the Hon’ble Supreme Court against the assessee in the case of Exide Industries Ltd Vs. U.O.I [2020 (4) TMI 792 - SUPREME COURT]. Respectfully following the same, we dismiss this ground (3a) of assessee’s appeal.
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