| |
| The Tax Publishers2020 TaxPub(DT) 0839 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A(2)
As per mandate of section 14A(2) read with rule 8D(1)(a), AO was required to examine assessee's books of accounts first and record his dis-satisfaction as to how disallowance made by assessee, was wrong. As AO failed to do so, additional disallowance made under rule 8D could not be sustained.
|
Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Non-recording of satisfaction by AO
Assessee earned tax free dividend income on shares and claimed suo moto disallowance under section 14A. However, AO invoked rule 8D and worked out disallowance. Assessee challenged this on the ground of non-recording of satisfaction by AO in terms of section 14A(2). Held: As per mandate of section 14A(2) read with rule 8D(1)(a), AO was required to examine assessee's books of accounts first and record his dis-satisfaction as to how disallowance made by assessee, was wrong. As AO failed to do so, additional disallowance made under rule 8D could not be sustained.
Relied: H.T. Media Ltd. v. PCIT (2017) 85 taxmann.com 113 (Delhi) : 2017 TaxPub(DT) 3929 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 37(1)
 SUBSCRIBE FOR FULL CONTENT
|