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2021 (2) TMI 796 - ITAT DELHIDisallowance u/s 14A - Suo moto disallowance by assessee - DR submitted that the main purpose for which the investment into shares is made by the assessee may not be relating as Section 14A applies irrespective of whether share are held to gain control or as stock-in-trade. Expenditure which is in relation to earning dividends can be disallowed u/s 14A and Rule 8D - HELD THAT:- The investments were out of assessee’s own funds and no borrowed funds were used to acquire investments. There was no interest expenditure which could be directly or indirectly attributable to the exempt income. CIT(A) further observed that the investments were strategic investment as per the assessee and the same should be excluded for calculating disallowance under Rule 8D. As per Rule 8D(2)(i), the assessee made disallowance of ₹ 16,05,000/- under the head strategic investment and has taken 20% of employee cost and 5% of administrative cost. Thus, the findings given by the CIT (A) is just and proper. Therefore, Ground No. 1 is dismissed. Disallowance of depreciation claimed a wind mills - CIT-A deleted the addition admitting fresh evidence in violation of Rules 46(3) of the Income Tax Rules - HELD THAT:- As details were submitted by the assessee during the assessment proceedings as per the reply/submissions dated 11.12.2012 which is mentioned on page 1 of the Assessment Order itself. There was no new evidence brought on record by the assessee and after the verification of the evidence the CIT(A) has rightly deleted the addition. In fact, the Assessing Officer has totally ignored the reply dated 11.12.2012 submitted by the Assessee. CIT(A) has given a categorical finding that the assets were owned by the assessee and were put to use for the purposes of its business during the year. Hence, there is no need to interfere with the detailed findings of the CIT(A). Hence, Ground No. 2 is dismissed. Addition u/s 36(1)(3) by holding that the assessee had borrowed funds which was used for business purposes and was paying interest on these funds - HELD THAT:- Assessee had borrowed funds which was used for business purposes and was paying interest on these funds and this fact was not controverted through any of the documents on the record by the Assessing Officer as well as by the Revenue at the time of hearing before us. Hence, the findings given by the CIT(A) is proper and there is no need to interfere with the findings of the CIT(A). Ground No. 3 is dismissed.
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