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2014 (10) TMI 951 - AT - Income TaxAddition u/s.14A - rule 8D applicability - computation of claim - Held that:- As gone though the order of the authorities below. It is the settled proposition of law that the application of Rule 8D is mandatory on and from A.Y. 2008- 09. We find that the disallowance has been computed as per the formula given under Rule 8D. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). Ground no. 1 with its sub-ground is dismissed. Addition of cash expenses - addition u/s 40A - Held that:- It is not in dispute that the assessee has incurred expenditure amounting to ₹ 2,39,73,409/- in cash. It is also an undisputed fact that the auditors have qualified in their report that amount of ₹ 9.18 lacs have been paid in cash in violation of the provisions of section 40A(3) of the Act. Although the same was claimed to be allowable as per Rule 6DD, however, no details have been furnished, neither before the Revenue authorities nor before us. Therefore, the expenditure of ₹ 9.18 lacs are clearly disallowable, as per the qualification of the Auditors. That leaves us with a balance disallowance of ₹ 38.76 lacs. In our considered opinion, 50% out of this should meet the ends of justice, therefore, in addition to the disallowance of ₹ 9.18 lacs, we direct the A.O. to restrict the disallowance out of the balance expenditure at ₹ 19.38 lacs meaning thereby that the total disallowance should be restricted to ₹ 28.56 lacs. Ground no. 2 with its sub ground is partly allowed.
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