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2014 (6) TMI 353 - AT - Income TaxDisallowance u/s 14A r.w. rule 8D of the Act - Administrative and managerial expenses towards investment activity for earning exempt income Held that:- Making disallowance at 2% of the exempt income of Rs. 15,76,758/- will meet both ends of justice of the facts Decided partly in favour of assessee. Disallowance made u/s 40(a)(ia) of the Act - Market support service expenses Fee for Technical Services (FTS)/Royalty Held that:- There was no nexus of the expenditure to the clientele of the company who received the payment, qua the services rendered by the employees/contract workers of the company as the case may be thus, the matter is remitted back to the AO and the AO is directed to examine not only the nature of employment of the persons whose names appear on the tax invoices and the nature of services rendered by them to the so called company Decided in favour of Assessee. Disallowance made u/s 37 of the Act - Mutual fund scheme expenses Whether the expenses in excess of 6% can be booked to the accounts of the assessee Held that:- Section 52 provides and enables the AMC like the present assessee to bear the expenditure in excess of the said 6% limitation - the relief granted by CIT(A) does not call for any interference Decided against Revenue. Disallowance of foreign travel expenses Held that:- As decided in assessees own case for the previous assessment year, it has rightly been held by the CIT(A) that the disallowance made by the AO on account of foreign traveling expenses and expenses incidental to foreign travel are set aside where no specific adverse material is not in possession of the AO Decided against Revenue. Disallowance of nontechnical expenses Held that:- Following Amway India Enterprises Versus Union of India And Another [2003 (5) TMI 55 - KERALA High Court] - there is no specific discussion appearing in the orders of the lower authorities - the orders of the lower authorities cannot be described as speaking order on each of such grounds - the AO is directed to allow the claim of the assessee after due verification of the genuineness and business nexus and also in accordance with the provisions of section 37 of the Act Decided partly in favour of Assessee.
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