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2014 (11) TMI 999

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..... /- and the same, in our view, would meet the ends of justice. Accordingly we modify the order of the Ld CIT(A) on this issue and direct the AO to restrict the disallowance u/s 14A of the Act to 10,000/-. - Decided partly in favour of assessee Disallowance made out of motor car expenses, travelling & conveyance expenses and telephone expenses - Held that:- With regard to the disallowance made out of Motor Car expenses and Traveling & conveyance expenses, the assessee did not find material to contradict the findings given by the tax authorities. Accordingly, we confirm the order of Ld CIT(A) on these two additions. With regard to the telephone expenses, the disallowance suggested by the Ld CIT(A) appears to be on higher side. Accordingly, we .....

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..... is personal name during the year under consideration. The only expenditure debited in the personal account was audit fee of ₹ 16,545/- and no expenditure was incurred in the concern M/s 4R Millenium securities. The Ld A.R further submitted that the assessee received dividend income of ₹ 1,56,00,246/- and the same was directly credited to the capital account of the assessee. Besides the above the assessee had received interest from PPF account to the tune of ₹ 1,80,413/- and interest from Tax Free Bond to the tune of ₹ 14,14,99,500/-. The Ld A.R submitted that the above said income were received from the investments made in the earlier years and hence no expenditure was incurred for earning the above said income durin .....

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..... nfirmed. However, it is a fact that the assessing officer has accepted for a nominal disallowance of ₹ 5,306/- in the immediately preceding year, meaning thereby the assessing officer has accepted that the Rule 8D cannot be applied to the facts of the instant case blindly. As submitted by Ld A.R, the assessing officer did not address various contentions of the assessee during the year under consideration, before working out the disallowance under Rule 8D(2)(iii) of the I.T Rules, i.e., the disallowance relating to administrative expenses computed at 0.5% of average value of investments. It is also a fact that the AO did not make any disallowance towards interest expenditure. 5. From the foregoing discussions and on consideration of t .....

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