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2016 (1) TMI 540 - ITAT AHMEDABAD

2016 (1) TMI 540 - ITAT AHMEDABAD - TMI - Disallowance under section 14A r.w.r. 8D - Held that:- There has been no disallowance under section 14A which essentially proceeds on the accepted position that there has been no use of borrowed funds in this case. So far as fresh investments made in the present year are concerned, it is not in dispute that the sale proceeds of the mutual fund investments during the year has been used in making the investments. The disallowance even under rule 8D must th .....

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e case of assessee’s group Aflon Alplast Pvt Ltd for the same assessment year and in respect of similarly worded orders of the authorities below, in favour of the assessee

Disallowance under section 40A(2)(b) - interest payment to the specified persons @ 24% pa, is excessive and unreasonable - Held that:- This issue is now covered, in the case of assessee’s group Aflon Alplast Pvt Ltd for the same assessment year and in respect of similarly worded orders of the authorities below, in f .....

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ear 2008-09. As both the appeals and the cross objection pertain to the same assessee, are for the same assessment year, and were heard together, as a matter of convenience, we are disposing of these appeals and the cross objection by this consolidated order. 2. We will first take up the appeal filed by the assessee, i.e. ITA No. 2950/Ahd/11. 3. In the first ground of appeal, the assessee is aggrieved of learned CIT(A) upholding the disallowance under section 14A r.w.r. 8D, to the extent of S .....

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he assessee has claimed various expenses, including interest, and that it is not possible to determine the amount of such expenditure in relation to earning of such tax exempt income . The Assessing Officer did note the assessee s submission that no expenses were incurred in earning the dividend income and the investments in mutual funds and shares were made out of the sale realization of mutual funds sold during the year, but proceeded to compute the disallowance on the basis of rule 8D, which .....

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ere has been no use of borrowed funds in this case. So far as fresh investments made in the present year are concerned, it is not in dispute that the sale proceeds of the mutual fund investments during the year has been used in making the investments. In view of these findings of fact and Hon ble jurisdictional High Court s judgment in the case of PCIT Vs India Gelatine & Chemicals Ltd (TA Nos 276 and 277 of 2015; judgment dated 27th April 2015), no part of the interest can be disallowed by .....

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. 2, the assessee is aggrieved of learned CIT(A) sustaining the disallowance in respect of motor car expenses of ₹ 2,35,830 and depreciation of ₹ 2,21,304. 9. Learned representatives fairly agree that this issue is now covered, in the case of assessee s group Aflon Alplast Pvt Ltd for the same assessment year and in respect of similarly worded orders of the authorities below, in favour of the assessee. A copy of this order dated 30th January 2015 was also placed before us. Learned De .....

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