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2017 (2) TMI 949 - AT - Income TaxAd-hoc disallowance u/s 14A - Held that:- As said in the earlier paragraphs the assessee earned 99% dividend from only the investment was made with JSW Steel Ltd. and the rest of the 1% dividend is from the other three companies which are also group companies. In so far as the contention of the assessee that all investments are strategic investments made to have control over the business, there is no material on record to show how these investments are strategic investments and there is no intention behind these investments to earn dividend income. At the same time, we noticed that the assessee has earned this dividend income only from four companies from the investments made in the previous year but not in the current assessment year. Therefore, even assuming that there should be some expenditure which could have been incurred by the assessee in earning exempt income in the circumstances of the present case disallowing ₹ 70,00,000/- on adhoc basis out of total expenditure of ₹ 86,08,855/- debited to P&L a/c is totally unjustified. Therefore, we direct the A.O to disallow 20% of the expenditure debited to P&L a/c as the reasonable expenditure which can be said to be attributable for earning the dividend income. - Decided partly in favour of assessee.
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