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2017 (2) TMI 212 - ITAT MUMBAIDisallowance made u/s 14A - Held that:- We have noticed earlier that the investments held by the assessee included investments made in the subsidiaries, bonds, debentures, growth scheme of mutual funds. The interest from bonds and debentures are not exempt and the growth schemes of mutual funds do not yield any dividend. The investments made in subsidiary companies, according to the assessee, are strategic investments. Further the assessee has submitted that it has carried out few transactions during the year under consideration only in the mutual funds by way of withdrawing money from the brought forward balance. Accordingly it was submitted that the provisions of Rule 8D should not have been mechanically applied under the facts of the present case. We find merit in the above said submissions of the assessee. A.R also submitted that there is no estoppel against the law and hence the assessee could plead for rectification of disallowance wrongly made by the assessee. We agree with the said contentions of the assessee also. The purpose of assessment is to determine the correct total income of the assessee. Hence wrong application of provisions of the Act needs to be corrected in order to arrive at the correct total income. We have noticed that certain vital facts concerning the investments have not been properly dealt with both by the assessee as well as the tax authorities. Hence, we are of the view that the issue relating to disallowance u/s 14A of the Act requires fresh examination at the end of the AO. Accordingly we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO for examining the same afresh.
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