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2014 (7) TMI 756 - ITAT MUMBAIExpenses on tax free dividend income u/s 14A – Held that:- The AO has not brought anything on record which could suggest that certain expenditures have been incurred for earning the exempt income, directly or indirectly – following GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COUR] - disallowance of 2% of the dividend income would meet the ends of justice - the AO is directed to restrict the disallowance to 2% of the dividend income – Decided partly in favour of Revenue. Deletion of the estimated addition – Held that:- The assessee’s accounts are audited - The requisite details were filed before the AO - The AO has not pointed out any specific expenditure which according to him was not properly supported by bills/ vouchers nor there is any specific finding that any expenditure have been incurred not for the purpose of business - the addition has been made on ad hoc basis - there was no reason to interfere with the findings of the CIT(A) – Decided against Revenue. Credit for TDS u/s 199 – Held that:- Assessee has duly furnished before the AO a statement of reconciliation of gross amounts in the books of account alongwith the gross amounts as per TDS certificates which has been completely ignored by the AO - assessee has disclosed income in respect of TDS certificate as receipt during the year itself - similar claim of TDS was allowed in the earlier year - CIT(A) has examined the reconciliation statement and on his examination the CIT(A) has given a categorical finding that the assessee is entitled for the credit of the TDS – the order of the CIT(A) is confirmed – Decided against Revenue.
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