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2013 (11) TMI 363 - AT - Income TaxDisallowance u/s 14A - whether investment in unquoted shares be excluded while applying the disallowance provisions of section 14A read with rule 8D of the Rules since capital gains sale of unquoted shares are not exempted u/s 10(38) – Adhoc disallowance of 5% – Held that:- Investment in unquoted shares did not result into short term capital gain during the year. If any dividend income was earned thereon the same was exempt as the value of investment in unquoted shares stood included at the last day of the financial year in the balance sheet – AO recorded his satisfaction about the incorrectness of the claim of the assessee whereby assessee had disallowed 5% of the dividend income under section 14A of the Act - No valid basis adopted by the assessee, the AO was right in rejecting the method adopted by the assessee for disallowance computed under section 14A of the Act. Since there is no defect in the calculation of the AO which is as per section 14A r.w. Rule 8D, the case is decided against the Assessee.
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