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2019 (9) TMI 294 - AT - Income TaxAddition u/s 14A r.w.r. 8D - HELD THAT:- As the issue under consideration is materially identical in TRANSPORT CORPORATION OF INDIA LTD. [2016 (11) TMI 245 - ITAT HYDERABAD] following the conclusions drawn therein we direct the AO to recalculate the disallowance as per rule 8D as per the guidelines given as above in the case of Transport Corporation of India and calculate the disallowance of expenditure under rule 8D(2)(ii) & (iii) taking the average investment from which the exempt income is received. Interest expenditure incurred by the assessee are towards the secured loans which are secured against the stock and working capital - HELD THAT:- AO cannot consider the above interest on secured loans which are committed to the business exclusively. AO may consider the other interest incurred by the assessee for the purpose of disallowance u/s 14A. Accordingly, these grounds are also remitted to the AO for recalculation. We cannot accept the contention of the assessee that investments were made on business expediency. When assessee makes investments and earns exempt income, irrespective of the fact that whether assessee has own funds or not, when the business has mixed funds, rule 8D will apply. Accordingly, this ground raised by the assessee is dismissed.
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