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2014 (9) TMI 1110 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Held that:- A perusal of the profit and loss account of the assessee reveals that the assessee had a net positive interest income, under such circumstances, it cannot be said that the assessee had incurred interest expenditure for earning of exempt income. For the remaining amount of expenditure on account of common administrative expenses is concerned, the disallowance of ₹ 8,61,509/- u/s 14A seems to be excessive, considering the taxable income of the assessee of ₹ 3,20,54,051/-. Moreover, the mechanical application of rule 8D in this case is not warranted, considering the submissions of the assessee that major part of the investment was in unquoted shares of the group companies, the capital gains income from which was not exempt and even no dividend income was received from such investments. Thus as the assessee has earned dividend income, it might have incurred some expenses for the said purpose, in our view, the interest of justice will be well served if the disallowance u/s 14A is restricted to 10% of the remaining/common administrative expenses of ₹ 16,60,983/-. - Decided partly in favour of assessee
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