| |
| The Tax Publishers2020 TaxPub(DT) 2871 (Mad-HC) INCOME TAX ACT, 1961
Section 14A
Where AO at first instance considered whether claim of assessee was correct and thereafter only he proceeded to determine amount by adopting the procedure under rule 8D, finding recorded by AO was sufficient and a clear indication of his compliance of procedure under section 14A(2).
|
Disallowance under section 14A - Expenditure against exempt income - Non-recording of satisfaction by AO -
Revenue challenged order of Tribunal holding that AO straightaway proceeded to apply rule 8D for purpose of disallowance under section 14A without specifying or complying with mandatory requirement of section 14A(2) or rule 8D(1). So holding, Tribunal held that AO having failed to comply with the statutory requirement, could not proceed to make disallowance under section 14A(1). Held: Finding recorded by AO was sufficient and a clear indication of his compliance of procedure under section 14A(2). AO at first instance considered whether claim of assessee was correct and thereafter only he proceeded to determine amount by adopting the procedure under rule 8D. For assessment year 2011-12, it could not be stated to be case where there was a failure to follow procedure under section 14A(2). So far as order passed for assessment year 2012-13 was concerned, it was found that though Tribunal directed assessee to work out expenditure component towards administrative and managerial aspect so that same shall be disallowed in computation of income, but did not issue any specific directions to AO as to what was to be done after assessee filed working sheet. Therefore, to that extent Tribunal committed an error. Matter was to be remanded back for fresh consideration of AO in accordance with law.
REFERRED : Pr. CIT v. Vedanta Ltd. (2019) 261 Taxman 179 (Del) : 2019 TaxPub(DT) 0525 (Del-HC) CIT v. M/s. J.K. Fenner (India) Ltd. [TCA No.785 of 2018 etc. batch dt. 11-12-2018] : 2019 TaxPub(DT) 0744 (Mad-HC) Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT & Anr. (2010) 328 ITR 81 (Bom) : 2010 TaxPub(DT) 2182 (Bom-HC) Tamilnadu Industrial Development Corporation Ltd. v. Asstt. CIT [I.T.A. Nos.691 and 692/Mds/2017, dt. 12-7-2017]
FAVOUR : Matter remanded
A.Y. :
 SUBSCRIBE FOR FULL CONTENT
|