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TMI Blog2014 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... n pointed out – The decision in JM FINANCIAL SERVICES PVT LTD Versus ADDL COMMISSIONER OF INCOME TAX. MUMBAI [2013 (8) TMI 821 - ITAT MUMBAI] followed - disallowance of 5% of the dividend income would be quite reasonable for working out the disallowance u/s 14A - following the same principle in this year also, 5% of the dividend income would be reasonable for making the disallowance u/s 14A - the AO is directed to restrict the disallowance at 5% of the dividend income – Decided partly in favour of Assessee. - I.T.A. No.1652/Mum/2012 - - - Dated:- 3-7-2013 - Shri B. Ramakotaiah, AM And Shri Amit Shukla, JM,JJ. For the Appellant : Mr. Dr. K. Shivaram Mr. Sanjay Parikh For the Respondent : Mr. Mohit Jain ORDER Per :Amit Shuk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.59 278.51 54.75 223.76 571% Therefore, general administration expenses allocable to dividend will be Rs. 87,363/-. Hence, total expenses allocable to earning dividend will be Rs. 102.663/-. 3. The Assessing Officer rejected the assessee's contention and held that 0.50% of average investment as on 31st March, 2006 and 31st March 2005 is to be treated as expenses relatable to dividend income. Accordingly, he worked out such expenses at Rs. 22,19,528/-, which cannot be held to be attributable to earning of dividend income. He further noted that the assessee has incurred indirect interest expenses of Rs. 9,71,349/- based on total assets as on 31.3.2006 and 31.3. 2005 had worked out the disallowance of Rs. 22,42,896/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8D cannot be held to be applicable in the Assessment Year 2006-07 but he confirmed the disallowance on the ground that it is quite reasonable. The assessee has worked out the disallowance of Rs. 1,02,663/- as per working given before the Assessing Officer, which has been incorporated in the forgoing paragraph. Such a working has not been commented upon either by the CIT(Appeals) or by the Assessing Officer. No specific, extra expenditure has been pointed out. In assessee's own case for the Assessment Year 2007-08, in ITA No. 3112, we have held that disallowance of 5% of the dividend income would be quite reasonable for working out the disallowance u/s 14A. Accordingly, following the same principle in this year also, we hold that 5% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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