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2016 (9) TMI 1551 - AT - Income TaxDisallowance u/s 14A - Computation of deduction - HELD THAT:- Decision for making investment of such a high magnitude would definitely require involvement of high officials. The assessee has not furnished the basis for allocating 1% of Authorised Signatory’s (CEO) salary expenses and 0.1% of his deputation expenses. It is also not known as to whether CEO alone took the decision for making investments in mutual funds. Normally such decisions are taken by consulting finance department and investment experts. However, such details are not available on record. It is difficult to accept the workings given by the assessee and we are of the view that the disallowance of ₹ 3,94,711/- made by the assessee appears to be on the lower side. However, since the number of transactions is limited, we are of the view that this issue may be settled by making an estimate on a reasonable basis. Accordingly, we are of the view that, considering the facts and circumstances of the case, the disallowance u/s 14A of the Act may be made at ₹ 10.00 lakhs in order to cover up the expenses relating to utilisation of human/other resources not considered by the assessee. In our considered view, the same would meet the ends of justice and we order accordingly. Accordingly the order passed by Ld CIT(A) stands modified accordingly and the AO is directed to disallow the above said amount of ₹ 10.00 lakhs u/s 14A of the Act. - Decided partly in favour of assessee.
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