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| The Tax Publishers2019 TaxPub(DT) 6648 (Chen-Trib) : (2019) 074 ITR (Trib) 0644 INCOME TAX ACT, 1961
Section 14A Rule 8D
As apparent, AO had not given any findings as to how the claim of assessee that no expenditure was incurred to earn exempt income was incorrect. In the absence of this finding resort to rule 8D could not be made in view of mandate laid down under section 14A(2). Accordingly, disallowance was deleted.
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Non-recording of satisfaction by AO
Assessee earned tax free income on investments in shares and claimed that no expenditure was incurred in relation to exempt income. However, AO invoked rule 8D and worked out disallowance.Held: As apparent, AO had not given any findings as to how the claim of assessee that no expenditure was incurred to earn exempt income was incorrect. In the absence of this finding resort to rule 8D could not be made in view of mandate laid down under section 14A(2). Accordingly, disallowance was deleted.
Applied:Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC). Relied: ,I.CIT v. Taikisha Engineering India Ltd., (2015) 370 ITR 338 (Del) : 2015 TaxPub(DT) 391 (Del-HC) and Pr. CIT v. Moonstar Securities Trading and Finance Co. (P) Ltd. (2019) 105 Taxmann.com 275 (SC) : 2019 TaxPub(DT) 2998 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 32(1)
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