The Tax Publishers2020 TaxPub(DT) 5423 (Del-Trib)

INCOME TAX ACT, 1961

Section 14A(2)

Before AO, assessee pleaded that most of the investments were made in the earlier year and from assessee's own funds, however, AO without having regard to assesse's account, straightwary invoked rule 8D and worked out disallowance, which was in contravention of mandate laid down under section 14A(2). Accordingly, invocation of rule 8D was not justified and, therefore, disallowance was deleted.

Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Non-recording of satisfaction by AO as to incorrectness of assessee's claim

Assessee earned tax free dividend income but claimed no disallowance under section 14A. AO invoked rule 8D and worked out disallowance. Assessee challenged this on the ground of non-recording of satisfaction by AO.Held: Before AO, assessee pleaded that most of the investments were made in the earlier year and from assessee's own funds, however, AO without having regard to assesse's account, straightwary invoked rule 8D and worked out disallowance, which was in contravention of mandate laid down under section 14A(2). Accordingly, invocation of rule 8D was not justified and, therefore, disallowance was deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :


INCOME TAX ACT, 1961

Section 28 Section 36(2) Section 37

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