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2014 (1) TMI 896 - AT - Income TaxDisallowance u/s 14A of the Act – Held that:- The AO has applied Rule 8D for working out the disallowance u/s 14A - The CIT(Appeals) has confirmed disallowance even though he agreed that Rule 8D cannot be held to be applicable in the Assessment Year 2006-07 but he confirmed the disallowance on the ground that it is quite reasonable - The assessee has worked out the disallowance as per working given before the Assessing Officer, which has been incorporated - Such a working has not been commented upon either by the CIT(Appeals) or by the Assessing Officer - No specific, extra expenditure has been pointed out – The decision in JM FINANCIAL SERVICES PVT LTD Versus ADDL COMMISSIONER OF INCOME TAX. MUMBAI [2013 (8) TMI 821 - ITAT MUMBAI] followed - disallowance of 5% of the dividend income would be quite reasonable for working out the disallowance u/s 14A - following the same principle in this year also, 5% of the dividend income would be reasonable for making the disallowance u/s 14A - the AO is directed to restrict the disallowance at 5% of the dividend income – Decided partly in favour of Assessee.
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