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2015 (12) TMI 1788 - AT - Income TaxDisallowance u/s. 14A read with Rule 8D(2)(iii) - CIT(A) upholding the disallowance of administrative expenses made by AO on investment in shares - whether the entire administrative expenses was incurred by the assessee for the purpose of investment in shares? - HELD THAT:- We compared the heads of accounts of the expenses of the administrative and other expenses and in comparison we find majority of expenses claimed by the assessee are more or less on same accounts, i.e., auditors remuneration, depreciation, legal and professional fees, business support fees etc. On perusing the schedule “L” related to administrative expenses we find none of the accounts are prima facie directly identifiable as one meant for earning the exempt of income. Some of the expenses so claimed in the schedule related to other business expenses. Similar is the case with the other appeals under consideration as well.AO mechanically applied the provisions of Rule 8D(2)(iii) without examining the books of accounts of assessee and therefore, the addition is unsustainable in law. See CAPE TRADING P. LTD. VERSUS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE – 29, MUMBAI [2015 (8) TMI 211 - ITAT MUMBAI] - Decided in favour of assessee
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