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2015 (1) TMI 964 - AT - Income TaxDisallowance u/s. 14A read with Rule 8D - CIT(A) deleted the disallowance in part - whether addition of ₹ 50,000/- sustained by CIT(A) is very excessive? - Held that:- Considering Audited Balance Sheet and P&L A/c for the year ended 31.3.2009 it is seen that no fresh investments during the year under consideration were made and source of such earlier year’s investment are out of interest free funds in the form of share capital and interest free loans as taken; no dividend income / tax free income was earned; entire expenditure as incurred under various heads was relatable to income from training services, which stands taxed. CIT(A) was right to some extent in deleting the disallowance of ₹ 17,27,733/-, but on the other hand we find no basis on which he has sustain the adhoc disallowance of ₹ 50,000/- as there was no basis for the Ld. CIT(A) to sustain ad-hoc disallowance of ₹ 50,000/- by holding that "the only expenses which can be attributed to exempt income likely to be earned in future are the auditor's remuneration and legal & professional charges". The auditor's remuneration and legal & professional charges incurred for maintenance of statutory books and its audit etc. were required to be incurred irrespective of whether the Company had any income or not and hence, there was absolutely no basis for considering a part of such expenditure towards earning of exempt income. Decided in fvaour of assessee.
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