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2016 (12) TMI 621 - ITAT MUMBAIDisallowance under section 14A r/w rule 8D - Held that:- Undisputedly, the total exempt income earned by the assessee during the relevant previous year is ₹ 31,232. Therefore, the expenditure relatable to such exempt income cannot exceed the quantum of exempt income. Moreover, the disallowance to be made under section 14A r/w rule 8D(2) should be of a reasonable amount, therefore, considering the facts and circumstances of the case, we are of the view that 5% of the dividend income earned should be considered for disallowance under section 14A. Amount received from FirstRand Bank Ltd., South Africa - capital or revenue receipt - Held that:- the entire issue has to be examined afresh by the Assessing Officer. The assessee has to demonstrate that there was a contract between the assessee and the bank, either in the capacity of a preferred partner or otherwise and in pursuance to such contract, the assessee has complied to the conditions imposed by terminating all his business professional / engagements in the field of investment banking or not accepting any offer relating to business / professional commitment in the field of investment bank from any other entity. If the assessee is able to establish these facts certainly the amount received by the assessee from FirstRand Bank Ltd., South Africa, can be treated as compensation received for financial loss suffered due to cancellation / termination of the contract, thereby, rendering it as a capital receipt, hence, not taxable. In view of the aforesaid, we are inclined to set aside the impugned order of the learned Commissioner (Appeals).
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