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2013 (2) TMI 728 - AT - Income TaxDisallowance of interest payment in respect of loans utilized for acquiring shares - Held that:- held that the investments made on the ground of commercial expediency has to be treated as a business investment irrespective of the fact that the income arising out of such investment will be exempted from taxation - Hon’ble Supreme Court in the case of SA Builders Ltd. vs. CIT - Decided in favor of assessee Disallowance of ₹ 22,98,746/- being 2% of the dividend income earned by the assessee - as expenditure attributable to dividend income - Held that:- top management of the company are required to decide about the investments - some management expenditure has to be attributed towards earning of tax-free dividend income - Here the investments were so old - the scope of expenditure also would be little lessor - A lumpsum amount of ₹ 10 lakhs is disallowed - Partly in favor of assessee Disallowance being interest paid on borrowings as relating to interest free advances - Held that:- Funds are utilized for the assessee’s own business - These are reflected in the books of account of the assessee - Decided in favor of assessee Applicability os Sec 14A - Payment of intrest - Held that:- When the shares are sold, the assessee will be liable for capital gains taxation and, therefore, the expenditure incurred in respect of borrowings cannot be classified purely in relation to income which does not form part of the total income - expenditure was incurred essentially for the purpose of the business - Decided in favor of assessee Disallowance of interest payment on loans utilized for acquiring shares of the assesse’s subsidiary - Held that:- As discussed above disallowance is not justified - Decided in favor of assessee Disallowance of general and administrative expenses pertaining to dividend income - Held that:-As per the reasons stated in order in ITA No.638/Mds/2012 the disallowance and is confirmed Addition in the computation of income under sec.115JB Held that:- The disallowance cannot change the frame of profit and loss account prepared by the assessee under the provisions of the Companies Act, 1956 - addition made by the AO for the purpose of book profit under sec.115JB is deleted.
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