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2022 (11) TMI 328 - AT - Income TaxAddition u/s 14A r.w.r. 8D - expenses incurred purportedly for earning exempt income - assessee stated that disallowance was highly unjustified since the investment earning exempt income had not been made out of the business funds of the assessee, but out of his own personal funds - As contended that the interest expenses claimed by the assessee can be safely attributed to relating to his business and having nothing to do with his investments earning exempt income - HELD THAT:- As the financial statements of the assessee produced before us that these investments are clearly not reflected in his business statements but in his personal financial statements. Even the Ld.CIT(A) gave an identical finding of fact in this regard in A,Y 2013-14, while dealing with identical issue of disallowance u/s 14A of the Act on identical investments in PPF and shares made by the assessee. In view of the above, the assessee having reasonably demonstrated that investment which had earned exempt income were made out of his personal funds which fact has been recorded even by the ld.CIT(A) in preceding year for the same investment, We see no reasons to uphold the disallowance of expenses made under section 14A of the Act in the impugned year. The disallowance made therefore as directed to be deleted. Appeal of the assessee is allowed.
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