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| The Tax Publishers2020 TaxPub(DT) 2777 (Del-Trib) INCOME TAX ACT, 1961
Section 14A
Though rule 8D was not applicable for the year under consideration i.e. assessment year 2005-06, however, some reasonable expenditure was required to be allowed for earning exempt income. Accordingly, AO was directed to restrict disallowance to 10% of dividend income.
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Disallowance under section 14A - Expenditure against exempt income - Rule 8D not applicable during the year -
Assessee earned tax free dividend income but claimed no disallowance under section 14A. AO estimated disallowance @ 25% of dividend income. Held: It was not in dispute that rule 8D was not applicable for the year under consideration. However, some reasonable expenditure was required to be allowed for earning exempt income. Accordingly, AO was directed to restrict disallowance to 10% of dividend income.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2005-06
INCOME TAX ACT, 1961
Section 10A
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