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2016 (1) TMI 1095 - ITAT MUMBAI

2016 (1) TMI 1095 - ITAT MUMBAI - [2016] 46 ITR (Trib) 317 - Disallowance u/s 14A - Held that:- Since the object of the assessee in making investment is to hold them as stock-in-trade. Accordingly, we are of the view that the methodology prescribed under Rule 8D(2)(iii) cannot be applied to the facts and circumstances of the instant case. Accordingly, we modify the order of the ld. CIT(A) and direct the AO to restrict the addition under Rule 8D(2)(iii) to ₹ 5,93,655/- Decided partly in fav .....

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in the assessee's own case relating to assessment year 2006-07 [2015 (1) TMI 1012 - ITAT MUMBAI ] - Decided against revenue - ITA No. 3357/Mum/2013, ITA No. 3388/Mum/2013 - Dated:- 1-1-2016 - B. R. Baskaran, AM And Amarjit Singh, JM For the Appellants : Shri Yogesh Thar & Yogesh Jain For the Respondent : Shri K Krishna Murty ORDER Per B R Baskaran, AM These cross appeals are directed against the order dated 27-02-2013 passed by Ld CIT(A)-13, Mumbai and they relate to the assessment year 200 .....

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Ld A.R placed reliance on host of case laws. 3. On the contrary, the Ld D.R submitted that the disallowance of administrative expenses under Rule 8D(2)(iii) is required to be made even if the interest free funds have been used for making investments. In this regard, he placed reliance on the following case law:- (a) Escorts Ltd (102 TTJ 522) (b) Southern Petro chemical industries (93 TTJ 161) (c) Smt. Leena Ramachandran (339 ITR 293)(Ker) 4. We heard the rival contentions on this issue and peru .....

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cordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine this issue by following the ratio rendered in the case of HDFC Bank Ltd (supra) and also any other decision that may be relied upon by the assessee and take appropriate decision in accordance with the law. 5. With regard to the expenditure which requires to be disallowed under Rule 8D (2)(iii), the ld.AR submitted that there is no requirement to make any disallowa .....

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thorities. 6. We find merit in the said submissions, since the object of the assessee in making investment is to hold them as stock-in-trade. Accordingly, we are of the view that the methodology prescribed under Rule 8D(2)(iii) cannot be applied to the facts and circumstances of the instant case. Accordingly, we modify the order of the ld. CIT(A) and direct the AO to restrict the addition under Rule 8D(2)(iii) to ₹ 5,93,655/-. 7. The next issue urged by the assessee relates to deduction of .....

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