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2012 (9) TMI 159 - HC - Income TaxAllocation of interest to be allocated to dividend income for deduction u/s 80-M - Held that:- As it had been found that no part of interest was attributable to earning income from dividend, as the respondent had sufficient funds for making the said investments, thus Tribunal was justified in law in not allowing interest to be allocated to dividend - in favour of assessee. Disallowance of financial advisory and due diligent services - Held that:- As the payments had been made for financial advice and for due diligence services with regard to utilization of resources / raw material for the respondent's plant and therefore, had to be allowed as an allowable business expenditure - in favour of assessee. Exemption of interest on a gross basis - Held that:- The Party had paid interest to the assessee in respect of the loans advanced to it and the assessee paid interest to party in respect of the outstanding bills issued by party. There was no connection between the two transactions. The section does not require or permit the netting of payments under two independent contracts albeit between the same parties - in favour of assessee. Disallowance of expenditure on Depository Services and Dematerialisation of share certificates - Held that:- The dematerialisation of shares did not result in either a quantitative or qualitative enhancement or improvement in the respondent's assets viz. the said shares. It resulted in the assessee's complying with the SEBI regulations and indeed facilitated the assessee's receiving dividends in respect of the investments. It did not however, affect the value of the shares to any extent whatsoever - the expenditure was allowable as normal business expenditure - in favour of assessee.
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