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2013 (1) TMI 786 - AT - Income TaxDisallowance of expenditure incurred in relation to income not includible in total income u/s 14A - Held that:- AO will have to verify the correctness of the claim that no expenditure has been incurred in relation to income which does not form part of total income - AO has to accept the claim of the assessee -after giving the reasonable opportunity with the correctness of the claim AO can reject the claim and state the reasons for doing do - further AO will have to determine the amount of expenditure incurred in relation to such income - As per the judjement of Hon’ble Jurisdictional High Court in [T.C.(A.) No. 2621] of 2006 titled as M/s. Simpson and Co. Ltd. vs. DCIT - it would be reasonable and appropriate if the disallowance is restricted @2% of the exempt income as returned by the assessee - decided partly in favor of assessee
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