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2013 (11) TMI 1639 - ITAT MUMBAIDisallowance to be made u/s.14A r.w.r. 8D - Held that:- For invoking provisions of section 14A of the Act, AO should indicate ‘cogent reasons’ for holding the view that he is not satisfied with the correctness of the claim of the assessee. We find that AO had not mentioned as how and why he was not satisfied with the claim made by the asseessee. While confirming the order of the AO,FAA has also ignored this vital factor. In taxation matters, recording of satisfaction is a pre-condition for invoking certain provisions e.g. section 132 or section 148. AO has not recorded any reason as to why he was not satisfied with the explanation filed by the assessee. Mere mentioning that he was not satisfied with the correctness of the claim made by the assessee, is not sufficient. He has to mention the reason for rejecting the claim of the assessee in no uncertain terms. Therefore, we are not able to endorse the views of the AO that were confirmed by the FAA. In our opinion, considering the facts of the case under consideration, further verification is required. Therefore in the interest of justice we are remitting back the matter to the file of the AO. He is directed to pass a reasoned and speaking order after affording reasonable opportunity of hearing to the assessee. Effective ground of appeal filed by the assessee is allowed in its favour, in part.
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