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2015 (8) TMI 1151 - AT - Income TaxDisallowance u/s.14A - assessee earned dividend income which was claimed as exempt under sec.10(34) - AO observed that funds for a company come in a common kitty. and they compromise of borrowed funds, share capital and retained earnings (reserves and surplus) - Held that:- AO made he disallowance by invoking the provisions of sec.14A read with Rule 8D. Rule 8D was inserted by the IT (Fifth Amdt.) Rules, 2008, w.e.f. 24.3.2008. Since, Rule 8D has no retrospective effect, it cannot be applied for the assessment year 2007-08. Further, there is every chance of incurring expenditure towards maintaining of investment which yields exempt income and this cannot be ruled out. Therefore, we direct the AO to allow ₹ 10 lakhs of expenditure attributable towards exempted income. The ld. AR relied on the order of the Tribunal in assessee’s own case for the A.Y. 2008-09, which is for the subsequent year and it cannot be applied for this assessment year. Decided partly in favour of assessee. Disallowance on account of syndication charges/guarantee fee paid u/s.40A(2)(b) - CIT(A) deleted addition - Held that:- Similar issue was considered in the case of M/s. AIG Home Finance India Ltd. [2011 (5) TMI 408 - ITAT, Chennai] wherein held 0.5% of guarantee fee paid by the assessee is not excessive or unreasonable but is well within the range as paid by the assessee to third parties and much lower than the percentage fixed by National Housing Board, which itself is an undertaking promoted by Reserve Bank of India. Therefore, we are of the view that the findings of the ld. CIT(Appeals) on this issue in deleting the disallowance is on right footing. - Decided against revenue. Disallowance under sec.36(1)(viii) - processing and other administrative charges - CIT(A) deleted addition - Held that:- Similar issue was considered in the case of M/s. AIG Home Finance India Ltd. [2011 (5) TMI 408 - ITAT, Chennai] wherein held that securitization amount is nothing but the interest on the housing loan which is discounted to the present net value. This amount would obviously be the income of the assessee from the long term housing loan disbursed by the assessee. In the circumstances, we are of the view that the securitization income is an income from business of long term housing finance. We are of the view that the same is eligible for deduction under Section 36(1)(viii) of the Act. Therefore, we uphold the finding of the ld. CIT(Appeals) in deleting the disallowance of the claim of deduction under Section 36(1)(viii) of the Act, which is on right footing and does not call for any interference - Decided against revenue.
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