Section 14A disallowance only for Expenses not directly relatable to exempt or taxable Income

Brief about the case The assessee company was engaged in the promotion of international telecom business and insurance business and filed its original return of income on declaring loss of Rs.16,07,22,655. The income was revised on16thDecember 2009, at a loss of Rs. 13,93,37,943. Consequent to the return having been picked for scrutiny, the AO observed the Assessee had shown dividend income of Rs.89, 02,540 out of which Rs. 68, 44,790 was claimed as exempt under section 10(34) of the Act. The Assessee was asked to show cause why a disallowance under Section 14A of the Act read with Rule 8D sho...