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2021 (12) TMI 98 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - assessee’s submission that no exempt income has been earned - HELD THAT:- As in light of the ratio laid down by the Hon'ble Supreme Court in the case of South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] in our considered opinion, there cannot be any disallowance of interest for earning exempt income and there is no reason to interfere with the findings of the ld. CIT(A). Disallowance on account of administrative expenses - We find that there is no dispute that all the investments are made in the sister concern in which the assessee has deep business interests and under business expediency, it has invested various amounts in shares of group companies. In our considered opinion, these investments are strategic investments made for furtherance of business of its sister concern. Apart from the investments in Bajaj Corp Ltd and Bajaj Hindustan, all other investments are unquoted investments and any appreciation in the value of shares at the time of sale would be taxable. Assessee has submitted details of each and every item of expenditure and has specifically pointed out that none of the same is incurred for the purpose of earning exempt income. It was brought to the notice of the Assessing Officer that the directors of the company are also employees of the sister concern, who do not draw any remuneration from the company and take care of entire investment work. No error or infirmity has been pointed out by the Assessing Officer who has simply computed the disallowances as per formula given in Rule 8D. In our considered view, such mechanical approach of the Assessing Officer has no legs to stand on. We, therefore, decline to interfere with the findings of the ld. CIT-A. Appeal of revenue dismissed.
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