ITAT holds no disallowance u/s 14A when assessee’s own funds much exceeds investments : ITAT Delhi Bench

During the year only an amount of 4 lakh was invested out of total investment of 3.39 crores. In the earlier years the assessment of the assessee  were complete u/s 143(3) and the AO did not make any disallowance u/s 14A. the term loan taken by the assessee was for specific purposes and it cannot be alleged without proof that the term loan granted by the bank for specific purposes, were diverted for the purposes other than for which it was granted. In fact during the year there is a decrease in borrowed funds from Rs. 23.45 crore to Rs. 22.35 crores.

Coming to the issue of disallowance  of proportionate administrative expenses, we find that the assessee had demonstrated that there is no regular activity carried out by the assessee for making investment. when there is no activity of investment worth noting, no administrative expenditure can be apportioned.

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