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2021 (7) TMI 664 - AT - Income TaxDisallowance u/s.14A - as per assessee exempt income was only in the form of dividend from mutual funds and further that there was no buying and selling of such funds frequently or on regular basis and it was only on maturity of old funds that new investments were made - HELD THAT:- Assessing Officer has only observed that the assessee's claim that it had not incurred any expenses in respect of management of investment affairs was not acceptable. The Assessing Officer has also observed that the earning of exempt income is not in nature of passive activity having no input. Assessing Officer could not have made the impugned disallowance when it was the assessee's claim that no expenditure had been incurred in relation to earning of exempt income specially because the assessee had duly explained that no expenditure was incurred in managing investments in the mutual funds which was based on free advice given by Deutsche Bank Investment Advisor. Accordingly, we set aside the order of the Ld. CIT(A) and direct the Assessing Officer to delete the impugned disallowance. - Decided in favour of assessee.
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