INCOME TAX ACT, 1961

Section 14A read with Rule 8D of Income Tax Rules, 1962

Disallowance under section 14A - Expenditure against exempt income - Suo moto disallowance made by assessee - AO made disallowance over and above suo moto disallowance made by assessee

Assessee-company earned exempt income during the year. It made suo moto disallowance under section 14A. However, dissatisfied, the AO computed the disallowance as per rule 8D(2), which was over and above the suo moto disallowance made by the assessee. On appeal, CIT (A) confirmed the action of the AO. Held: Since AO failed to record mandatory satisfaction before proceeding to make disallowance under section 14A; such disallowance made by the AO over and above the suo moto disallowance made by assessee, was accordingly deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 115JB

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