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2017 (2) TMI 1094 - AT - Income TaxAddition u/s 14A qua expenses relatable to exempt income - Held that:- This issue is settled by Income Tax Settlement Commission in its order vide settlement application No.MH/MUCC-4/118/2012-13/IT for the A.Y. 2008-09, the year under consideration, and restricted the disallowance at ₹ 4,24,76,189/-. We direct the AO to adopt the Income as directed by the Income Tax Settlement Commission. This issue of assessee’s appeal is partly allowed. Non-deduction of TDS u/s 40a(ia) - Held that:- Income Tax Settlement Commission has directed that no disallowance on the issue of non-deduction of TDS on income capitalized also short- term and / or non-deduction of TDS on payment made to group entities be not disallowed by invoking the provision of section 40a (ia) of the Act. - Decided in favour of assessee Reduce the value of investment reflected in the balance sheet of the assessee to the extent of brokerage expenses - Held that:- We remand this issue back to the file of the AO with direction to verify whether this amount of ₹ 66.90 loss being brokerage on which TDS is not effected has been capitalized or not. In case these amounts are capitalized and not claimed in the P & L account, the disallowance cannot be made by invoking the provisions of Section 40a(ia) of the Act. In case these are claimed then the assessee is liable to deduct TDS and amount is to be disallowed in the absence of TDS. In term of the above, the issue is remanded back to the file of the AO for verification of the AO.
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