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| The Tax Publishers2020 TaxPub(DT) 2983 (Del-Trib) INCOME TAX ACT, 1961
Section 14A(2)
Where AO failed to record dissatisfaction as regards correctness of assessee's claim under section 14A, invocation of rule 8D was not in accordance with section 14A(2) and, therefore, additional disallowance made by AO, could not be sustained.
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Non-recording of satisfaction as to non-correctness of assessee's claim by AO
Assessee earned tax free dividend income on investments and claimed suo moto disallowance under section 14A. AO invoked rule 8D and worked out additional disallowance. Assessee challenged this on the ground of non-recording of satisfaction by AO as to non-correctness of assessee's claim. Held: As AO failed to comply with mandatory requirement of section 14A(2) read with rule 8D(ia) to record his satisfaction, additional disallowance made by AO could not be sustained.
Followed:Godrej & Boyece Mfg. Co. Ltd. v. Dy. CIT (2017) 394 ITR 449 (SC) : 2017 TaxPub(DT) 968 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 80-IA
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