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2014 (6) TMI 810 - AT - Income TaxDisallowance u/s 14A of the Act – Dividend income – Held that:- Expenditure has no direct relationship with the income that may arise on its incurring or from investment, so that estimating the expenditure that stands incurred in relation thereto with reference to income arising there-from is without basis, both on facts as well as in law, even as observed by us during hearing - the Revenue also must bear in mind that the disallowance u/s 14A is only of the expenditure actually incurred, so that the assessee’s claim of having in fact not incurred any expenditure or a lower expenditure would need to be examined on merits, and the estimation per rule 8D made, having regard to the common expenditure actually incurred, i.e., on activities yielding taxable income and income which does not form part of the total income under the Act, which would therefore need to be apportioned, and toward which r. 8D stands prescribed by law - Relying upon GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the matter is to be remitted back to the AO for fresh adjudication –Decided in favour of Assessee.
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