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| The Tax Publishers2019 TaxPub(DT) 0166 (Del-Trib) INCOME TAX ACT, 1961
Section 14A
Where AO had made addition under section 14A without recording satisfaction having regard to expenditure incurred by assessee in relation to exempted income, assessee has rightly submitted that disallowance was also against the principle of consistency in the absence of any facts.
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Disallowance under section 14A - Expenditure incurred against earning of exempted income - No disatisfaction recorded by AO -
Assessee-company had made investment for the purpose of earning dividend income which was exempt and incurred expenditure in relation to earning of exempted income. AO disallowed the expenses incurred under section 14A by invoking rule 8D of Income Tax Rules, 1962 . Held: AO did not even identify any specific item of expense and he merely says that explanation of assessee was not correct as huge investment was made. There was no satisfaction of terms of section 14A read with rule 8D. Assessee has rightly submitted that disallowance was also against the principle of consistency in the absence of any facts.
Followed:Cheminvest Limited v. CIT-VI (2015) 378 ITR 33 (Del-HC) : 2015 TaxPub(DT) 3520 (Del-HC) CIT-IV v. Holcim India P. Ltd. in (ITA No. 486/2014 & ITA No. 299/2014, dt. 5-9-2014) : 2014 TaxPub(DT) 3780 (Del-HC) CIT v. Oriental Structural Engineers (P) Ltd in (ITA 605/2012, dt. 15-1-2013) : (2014) 60 (I) ITCL 594 Maxopp Investment Ltd., Cheminvest & Others v. CIT, and CIT v. Escorts Finance Ltd (2012) 347 ITR 272 (Del-HC) : 2011 TaxPub(DT) 2171 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 32
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