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2021 (5) TMI 519 - AT - Income TaxDisallowance u/s 14 A computed applying Rule 8D - HELD THAT:- Tribunal has dealt with the identical issue in case of Oswal Woolen Mills Ltd. Vs. ACIT [2019 (7) TMI 1601 - ITAT CHANDIGARH] and directed the AO to restrict the disallowance u/s 14A of the Act, to proportionate amount computed by the assessee. Contention of the assessee in respect of disallowance under Rule 8D(iii) was that it had not incurred any administrative expenses for earning exempt income. Since the AO had not recorded any dissatisfaction taking into consideration the accounts of the assessee, the coordinate Bench directed the AO to restrict the disallowance to the proportionate amount computed by the assessee after including the personal expenditure and certain other expenses. In the present case also, the contention of the Ld. Counsel is that there is no change in the facts of the present case and the assessee has submitted the working in this case in accordance with the order passed by the Tribunal in the case discussed above. DR did not controvert the contention of the Ld. Counsel that there is no material change in the facts of the present case. However, during the course of arguments, submitted that even if the disallowance is to be computed as per the order of the Tribunal rendered in the case of Oswal Woolen Mills (supra), the working submitted by the assessee cannot be accepted as correct without verifying the same by the AO. Accordingly, the Ld. DR submitted that the issue may be sent back to the AO for determining the disallowance considering the plea of the assessee that the issue involved is covered by the order of the Tribunal. The assessee has placed on record the working of proportionate disallowance after including the personal expenditure. Thus no reason to take a different view in this assessment year. Hence, respectfully following the decision of the coordinate Bench rendered in assessee’s own case for the assessment year 2010-11, we send this issue back to the AO for determining the disallowance on proportionate basis in accordance with the direction given by the coordinate Bench in the case of Oswal Woolen Mills Ltd. Vs. ACIT (supra) or to restrict the disallowance to the amount computed in working furnished by the assessee if found in accordance with the order of the Tribunal. Disallowance of interest of CC account for purchase of fixed assets - contention of the assessee is that it had sufficient funds in the shape of capital reserve and surplus, therefore the findings of the Ld. CIT(A) are contrary to the settled principles of law - HELD THAT:- We notice that the authorities below have not rebutted the contention of the assessee that it had sufficient funds for acquiring assets in question - The judgment of various Courts in the case of Hero Cycles(P) Ltd. [2015 (11) TMI 1314 - SUPREME COURT], Bright Enterprises Pvt Ltd.[2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] held that no disallowance of interest is called for where the assessee has got sufficient own funds. The Assessing Officer is directed to go through the fund position namely capital and interest free advances, reserves and surplus to determine whether any borrowed funds have been utilized more than available own funds and take a decision keeping in view the decisions rendered above. Thus we set aside the findings of the ld. CIT(A) and send this issue back to the AO for deciding the issue afresh.
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