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2012 (8) TMI 638 - AT - Income TaxDisallowance of interest - Held that:- No disallowance can be made u/s 14A of the Act out of the interest claim – Assessee has received interest free dividend income which was claimed exempt u/s 10(33) - amount of Rs. 5000/- can be considered as expenditure for earning of such dividend, therefore, an amount of Rs. 5000/- is appropriate for disallowance u/s 14A - A.O. directed to make addition of Rs.5000/- only. The ground raised by assessee is partly allowed. Long term capital loss on sale of shares - A.O. was of the opinion that the transactions of sale of shares in all these related companies/persons on which loss was claimed are malafide and sham transactions – Held that:- Just because of assessee sold shares to daughter and sister concern, it cannot be considered that the transactions are sham transactions - A.O. has not disputed the valuation of share or sale price. There is also no dispute to the fact that these are investments and gain or loss are long term in nature - AO accepted Long term capital gain offered by assessee without any question - transactions cannot be treated as sham transactions as assessee is well within his rights to set off loss incurred on sale of shares
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