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2016 (1) TMI 1236 - AT - Income TaxSection 14A disallowances - proportionate expenditure computed in respect of administrative and other expenses - Rule 8D applicability - Held that:- Rule 8D of the Income Tax Rules to be applicable only from assessment year 2008- 09. Proportionate disallowance qua assessee’s dividend incomes earned in the two impugned assessment years - Held that:- There is no dispute that the assessee is already an investment company only deriving exempt income to the tune of almost 90% of the gross receipts in former assessment year. We observe in these facts that it has failed to attribute whole of the expenditure amounting g to ₹ 28,21,000/- qua earning of the remaining miniscule taxable income. This has made the CIT(A) to invoke the impugned proportionate disallowance in view of these facts and circumstances. The assessee has relied upon a catena of case of law in support of its contentions opposing proportionate disallowance. None of the said cases seem to involve an investment company alike the assessee. We hold in other words that the assessee company incurs its expenditure in making share investments only keeping in mind its business and exempt income of more than 90% of the gross receipts. We find no merits in assessee’s sole substantive raised in both impugned assessment years.
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