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2016 (1) TMI 1257 - AT - Income TaxDisallowance u/s 14A - Held that:- The relevant assessment year under appeal is 2002-03 at which point of time, the provisions of Rule 8D was not in force and the same was made applicable only from Asst Year 2008-09 as decided in the decision of Godrej & Boyce Manufacturing Company Ltd in (2010 (8) TMI 77 - BOMBAY HIGH COURT ). However, it is not in dispute that the assessee had derived taxable income as well as tax free income and incurred expenditure for deriving both the incomes and hence disallowance is definitely warranted in terms of section 14A which is brought in the statute book with retrospective effect from 1.4.1962. The disallowance had to be made only on an estimated basis with regard to the expenditure incurred for the purpose of earning tax free income. Thus we direct the Learned AO to disallow 1% of dividend income under this issue and accordingly, the grounds raised by the assessee are set aside to the file of Learned AO to make addition as directed above.
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