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Deduction u/s 14A - Held that:- We do not think, upon reading of the Tribunal's order, that it is vitiated by any error of law apparent on the fact of the record. It cannot be termed as perverse because in the return of income declaring total income of ₹ 1,32,82,806/-, the Assessing Officer noticed that a sum of ₹ 32,74,921/- has been received as dividend and ₹ 87,52,106/- as long term capital gains, which has been claimed as exempt under section 10 of the Income Tax Act, 1961. We are only concerned here with the dividend.

The Assessing Officer held that certain amount of administrative expenditure was attributable towards earning the dividend income and difficult to accept the contention of the Assessee that no expenditure has been incurred to earn such income. He therefore disallowed the sum of ₹ 76,15,743/- under section 14A read with Rule 8D. This order of the Assessing Officer was partly set aside in Appeal by the Commissioner and held that even if the Assessing Officer's view is to be maintained, still, the entire claim could not have been disallowed. The Tribunal had taken earlier view that 10% of the dividend earned should be treated as expenditure incurred. Thus, in earning the income of dividend 10% was set aside towards expenses. This view of the Tribunal was applied and in identical facts by the Commissioner to the present case. Such an approach of the Commissioner and relying upon the law laid down by this Court in the case of Godrej and Boyce Manufacturing Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) has not been interfered with in Appeal by the Tribunal. - Decided in favour of assessee.


 

 

 

 

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