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2022 (3) TMI 150 - AT - Income TaxDisallowance u/s 14A - HELD THAT:- In the present case, the assessee has made disallowance u/s 14A r.r.8D even though the assessee has not received any exempt income. We are of the view that it is also settled principle that the assessee is required to pay tax on true and correct income. The main contention of the Ld.Counsel for the assessee is that due to oversight the assessee made disallowance. The disallowance itself is contrary to law in the absence of exempt income. We found force in the argument of the assessee that in the absence of exempt income, the provisions of 14A r.w.r 8D is not applicable. It is settled issue that if the assessee has not received dividend income, section 14A r.w.r.8D of the Act cannot be made applicable in the absence of exempt income. Therefore, we do not find any infirmity in the order passed by the Ld.CIT(A). Disallowance of expenditure which is preliminary and capital in nature - as per CIT-A AO is not justified in disallowing the expenditure - HELD THAT:- As assessee has submitted that majority of the expenses are for pre-bid studies of road projects and investment maintenance charges was already disallowed by the assessee in its computation of income. CIT(A) considered all these aspects and rightly allowed the ground raised by the assessee. We are of the view that the Ld.CIT(A) rightly considered the nature of expenditure, therefore needs no interference. Accordingly, the ground raised by the revenue is dismissed.
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