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2014 (10) TMI 936 - AT - Income TaxDisallowance of indirect expenditure for increasing the share capital - Held that:- Disallowance was made by the Assessing Officer purely on guess work and on adhoc basis without any iota of evidence that the assessee has incurred further expenditure over and above what is recorded in the books. It is the settled proposition of law that presumptions and surmises however strong may be cannot be the basis for addition. Since in the instant case, there is no direct or indirect evidence brought on record by the Assessing Officer that the assessee has incurred further indirect expenses for the purpose of increasing the share capital of the company, therefore, the addition made by the Assessing Officer deserves to be deleted. We accordingly direct the Assessing Officer to delete the same. Disallowance u/s 14A - amount incurred for increasing the share capital - Held that:- From the various details furnished by the assessee we find the disallowance claimed as deduction u/s.35D was disallowed by the Assessing Officer and the assessee did not press the grounds of appeal No.1 in which it has challenged the order of the Assessing Officer in disallowing the claim of deduction u/s.35D. Once the same is disallowed, there cannot be any further addition u/s.14A since it amounts to double disallowance. We accordingly direct the Assessing Officer to delete the addition. Claim of deduction u/s.10A - Held that:- Assessing Officer is not justified in restricting the deduction u/s.10A on account of disallowance u/s.40(a)(ia) and 43B. Comparable selection - Held that:- Considering the software development services rendered by the assessee the companies dissimilar with that of assessee need to be deselected from final list of comparables.
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