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2017 (11) TMI 677 - AT - Income TaxDisallowance of expenses relatable to exempt income u/s 14A read with rule 8D - Held that:- No disallowance under section 14A read with Rule 8D of the Rules can be made wherein, investments on which income earned is exempted, but the investment held as stock-in-trade. However, the AO will verify that the investment is made in stock-in-trade and will, accordingly decide the claim. This issue in both the appeals of the assessee is allowed for statistical purposes and remanded the matter back to the file of AO for verification. Adhoc disallowances to the extent of 50% of expenses on computer software, conveyance expense and diwali expenses - Held that:- According to AO, the expenses are not fully vouched and hence, he disallowed by estimating at the rate of 10% and accordingly, he disallowed ₹ 75,000. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) also confirmed the action of the AO. As the assessee is unable to controvert the findings of the Assessing Officer even now before us, the assessee could not substantiate the disallowance made by the AO, hence, we confirmed the disallowance.
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