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The Tax Publishers2019 TaxPub(DT) 0816 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A(2)
Since AO failed to record satisfaction as to how suo motu disallowance claimed by assessee under section 14A was not correct having regard to acounts of assessee, therefore, mechanical invocation of rule 8D could not be sustained in view of section 14A(2) & (3) and addition/disallowance was, therefore, deleted.
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Non-recording of satisfaction
Assessee earned tax free dividend income and claimed suo moto disallowance under section 14A. However, AO invoked rule 8D and worked out additional disallowance.Held: AO failed to record satisfaction as to how suo moto disallowance claimed by assessee under section 14A was not correct having regard to acounts of assessee, therefore, mechanical invocation of rule 8D could not be sustained in view of section 14A(2) & (3) and addition/disallowance was, therefore, deleted.
Relied:Godrej & Boyce Manufacturing Company Ltd. v. Dy. CIT (2017) 81 Taxmann.com 111 (SC) : 2017 TaxPub(DT) 0968 (SC) and Maxopp Investment Ltd. v. CIT 12-2-2018, (2018) 91 Taxmann.com 154 (SC) : 2018 TaxPub(DT) 1403 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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