| |
| The Tax Publishers2020 TaxPub(DT) 3707 (Del-Trib) INCOME TAX ACT, 1961
Section 14A
Since AO failed to record satisfaction as to how suo motu disallowance worked out by assessee under section 14A was not plausible, additional disallowance made under rule 8D was deleted especially when rule 8D was not applicable during the concerned year.
|
Disallowance under section 14A - Expenditure against exempt income - Non-recording of satisfaction by AO as to non-correctness of assessee's claim under section 14A -
Assessee earned tax free dividend income on investments on shares and claimed suo-motu disallowance under section 14A. However, AO invoked rule 8D and worked out additional disallowance. Assessee challenged this on the ground of non-recording of satisfaction by AO. Held: AO computed disallowance as per rule 8D which was not applicable for the year under consideration, i.e., assessment year 2007-08. Assessee made disallowance at 10% which was in support for earlier assessment year 2006-07 which was confirmed by Tribunal in assessee's own case being ITA No. 1805/Del/2009 Order, dated 3-4-2019. It was pertinent to note that AO also not recorded satisfaction as to how working given by the assessee was not plausible. Accordingly, suo motu disallowance @ 10% was reasonable and could not be faulted with.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2007-08
INCOME TAX ACT, 1961
Section 43A
 SUBSCRIBE FOR FULL CONTENT
|