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2021 (10) TMI 1046 - AT - Income TaxEstimation of income - Bogus purchases - disallowance at 10% of disputed purchases made during the year - assessee is one of the beneficiaries of various dealers who provide only accommodation entries without any delivery of goods based on the information received from Sales Tax Department, Mumbai - HELD THAT:- Taking the totality of the facts and circumstances into consideration we are of the view that ends of justice would be met if the disallowance is sustained at 6% of the alleged bogus purchases considering the fact that even the Assessing Officer in his remand report did not dispute the records in respect of purchases, consumption, sales as well as the stock reconciliation etc., furnished by the assessee - we direct the AO to restrict the disallowance to 6% of the alleged bogus purchases. Ground raised by the assessee on this issue is partly allowed. Deduction u/s. 35(2AB) - assessee company has incurred expenditure on research and development activities and has claimed additional deduction u/s. 35(2AB) - application for approval in form 3CK was made after the close of the Financial Year - HELD THAT:- Merely because approval is received in the subsequent year, the deduction u/s 35(2AB) could not be denied to the assessee - denial of deduction u/s. 35(2AB) of the Act on the ground that the application for approval in form 3CK was made after the close of the Financial Year is also unsustainable. See BANCO PRODUCTS (INDIA) LTD.[2018 (7) TMI 1559 - GUJARAT HIGH COURT] - we have no hesitation in holding that the deduction u/s.35(2AB) as claimed by the assessee is to be allowed. Hence, the deduction u/s 35(2AB) as claimed by the assessee is allowed. Disallowance u/s 14A r.w.r. 8D - CIT-A deleted the addition - HELD THAT:- It is the finding of the Ld.CIT(A) that the financial statements of the assessee shows that it had sufficient own funds to make the investments on equities. The Ld.CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and HDFC BANK LTD. [2014 (8) TMI 119 - BOMBAY HIGH COURT] held that there is no case for disallowance of any interest under Rule 8D(2)(ii) of I.T. Rules. We do not find any infirmity in the order of the Ld.CIT(A) in deleting the interest disallowance. The order of the Ld.CIT(A) is affirmed on this issue. The ground raised by the revenue is rejected.
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