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2012 (8) TMI 303 - AT - Income TaxDisallowance of penalty for violation of the bye-laws of the Stock exchange u/s 37 - Business expenditure - assessee is a stock broker - Held that:- As decided in CIT Vs The Stock and Bond Trading Co.[2011 (10) TMI 172 - BOMBAY HIGH COURT ] the payments made by the assessee to the Stock Exchange for violation of their regulation are not on account of an offence or which is prohibited by law and the invocation of explanation to Sec. 37 of the I.T. Act 1961 is not justified - as addition cannot be sustained, therefore provisions of Sec. 194C is clearly not attracted and no disallowance of such amount could be made by invoking of Sec. 194C r.w.sec. 40a(ia) as pleaded by AO - in favour of assessee. Disallowance towards foreign travel expenses - Held that:- As for assessment year 2002-03 , the CIT(A) has allowed entire travelling expenditure for trips to Dubai and 50% of such expenditure for trips to other places considering the submission that assessee is also engaged in the business of financial activities including leasing financial and advisory services and that the Directors had visited Dubai to study real estate market - as the issue in the year under question is same the same order is to be followed - in favour of assessee. Disallowance of expenses u/s. 14A r.w.r. 8D - Held that:- As the available funds with the assessee are far more than the borrowed funds & that the borrowings of the company in the immediately preceding year were to the tune of ₹ 5,24,19,372/- which has substantially come down to ₹ 22,13,822/- which means that the investments have been made out of interest free funds i.e. assessee’s own funds. Therefore no disallowance can be made u/s. 14A - in favour of assessee.
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