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2015 (10) TMI 2757 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Computing disallowance applying the proportionate method - HELD THAT:- Out of the total expenses claimed of ₹ 31,13,082/-, the amount disallowed in relation to dividend is of ₹ 25,36,669/-. Now, this is evidently absurd on the face of it and the assessee is correct in contending that since there is huge other income, the quantum of disallowance is entirely unreasonable. Rather, a reasonable disallowance can be made, if the accounts of the assessee are considered, without taking recourse to Rule 8D of the Rules. As assessee has contended that the total expenses claimed (as above) being ₹ 31,13,082/-, the total income ( as above) being of ₹ 80,189,889/- and out of this income, dividend being of ₹ 904,668/-, the disallowance of expenses needs to be worked out by applying the proportionate method, as per which, the disallowance works out to ₹ 35120/- it is found to be acceptable. The total income, the dividend and the total expenses claimed being as above, as discussed, the disallowable expenses would work out to ₹ 35,120/-, applying the proportionate method. Therefore, the disallowance is restricted to ₹ 35,120/-. Accordingly, Ground No.1 is partly accepted. Disallowance u/s 94(7) - According to CIT(A) as per section 94(7) only the short term capital loss ought to have been added - HELD THAT:- Since no worthwhile challenge had been laid to the above finding of the ld. CIT(A) by the assessee before us, finding no error therein, the action of the ld. CIT(A) in restricting the addition
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