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2021 (4) TMI 331 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - AO was of the view the borrowed fund has been utilized by the assessee in the earning of exempted income - HELD THAT:- Admittedly, the own fund of the assessee exceeds the amount of investment shown in the balance sheet as on 31/03/2013. Therefore an inference can be drawn that the assessee had not utilized borrowed fund in making such investment. Thus there cannot be any disallowance on account of interest expenses as provided under Rule 8D of Rules. See RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and HDFC BANK LTD. [2014 (8) TMI 119 - BOMBAY HIGH COURT]. Thus we hold that no disallowance of interest expense claimed by the assessee can be made on account of investments as discussed above. Administrative expenses disallowance - We find that the assessee has claim to have maintained separate books of accounts and accordingly the assessee has prepared separate income and expenditure account. On perusal of the income and expenditure accounts we find that the assessee has claim only bank charges and demat charges amounting to ₹ 2728.91/- only. As such we find that the assessee has not debited any other expenses in its personal income and expenditure account which the assessee might have incurred in earning such dividend income. Such administrative expenses may include accountancy expenses, electricity expenses, traveling expenses, stationary expenses, salary expenses etc. On a specific question to the Ld. AR for the assessee about the non-disallowance of other administrative expenditure, the assessee cannot make any satisfactory reply rather he agrees to confirm the disallowance made by the authorities below qua the administrative expenses. Hence we confirmed the findings of the authorities below for the disallowance of ₹ 42,079/- under the provision of section 14A r.w. Rule 8D of Rules. Thus the grounds of appeal of the assessee is partly allowed.
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