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2012 (4) TMI 242 - AT - Income TaxExpenses incurred for earning tax exempt dividend of – Rule 8D - Section 14A - Held that:- The elaborate formulae which has been adopted for making the disallowance is precisely what rule 8 D mandates- something directly contrary to the decision of Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd's case (2010 -TMI - 78448 - BOMBAY HIGH COURT) - The very approach adopted by the CIT(A) is unreasonable, contrary to legal position, and without regard to the specific facts of the case - there are no direct costs involved in funding the investments - The assessee has disallowance direct costs in earning the dividend, an as for indirect costs, the assessee has suo motu made a disallowance of by computing the at 0.5% of average investments - disalownace offered by the assessee is fair and reasonable and the CIT(A) ought to have accepted the same.
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