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2014 (5) TMI 697 - AT - Income TaxDisallowance made u/s 14A of the Act r.w. Rule 8D of the Rules – Held that:- The assessee has incurred the expenses which could be either directly or indirectly attributed to the income or for earning the same, a disallowance to the proportionate extent would follow – Relying upon Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - it is not only the investment in shares, yielding dividend, but also that in the partnership firm that would stand to be reckoned for the purpose of the relevant investment in computing the disallowance under rule 8D, i.e., where no interest income is contracted for, so that the only income that could arise from the said investment is the share of profit, which is tax exempt. Inclusion of bank FDRs - Held that:- The Revenue authorities mechanically apply the formula of r. 8D and did not apply the corrective even at the appellate stage – thus, the matte is liable to be remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
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