Indiabulls Financial Services Ltd. v. Dy. CIT

INCOME TAX ACT, 1961

--Disallowance under section 14A--Expenditure against exempt incomeAO skipped to record his dissatisfaction as to disallowance made by assessee----Where after carrying out elaborate analysis AO made disallowance under section 14A read with rule 8D, then such disallowance cannot be turned down merely because AO failed to record express dissatisfaction as to correctness of assessee's claim with regard to expenses claimed by assessee.--AO drew dissatisfaction with regard to correctness of assessee's claim in relation to expenditure against exempt income on an objective basis and proceeded to make disallowance under section 14A read with rule 8D. Assessee challenged the disallowance on the ground that AO without adducing some reasons, made disallowance. Held: AO had made elaborate analysis before proceeding to make impugned disallowance and mere fact that he did not expressly record his dis-satisfaction, would not per se lead to conclusion that he was not satisfied as to justification for the disallowance. To insist that AO should pay such lip service regardless of the substantial compliance with provisions would, in fact, destroy the mandate of section 14A. Therefore, disallowance being otherwise in accord with rule 8D(c) was justified.