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2011 (1) TMI 41 - AT - Income TaxDis allowance of expenditure u/s 14A - Dividend income - rule 8D - Held that: - the AO was duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The AO must adopt a reasonable basis and method consistent with all relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record. Thus, it is clear from the said decision that even if Rule 8D is not applicable but AO is duty bound to compute the disallowance under sub-section (1) of Section 14A and AO must adopt a reasonable basis and method consistent with all relevant facts and circumstances. - AO directed to recompute the dis allowance in view of decision of Hon'ble Bombay High Court in the case of Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT)
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