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2016 (5) TMI 1292 - ITAT JAIPURDisallowance u/s 14A - Held that:- The provisions of Section 14A of the Act read with rule 8D of Income-tax Rules, cannot be invoked in mechanical way by the AO. As per Section 14A(2), the AO is required to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the Act and in accordance with Rule 8D of Income-tax Rules, 1962 if the AO having regard to the accounts, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to such exempt income, he is empowered for making disallowance as per Rule 8D. In the case in hand, no finding is recorded by the AO in this regard. On the contrary, the ld. CIT(A) has given a finding after examining the accounts of the assessee. The AO has not brought on record any material to show that the assessee has incurred any expenditure in relation to the income which do not form part of the total income. Moreover, it is not in dispute that the assessee has earned exempt income of ₹ 27,006/- and expenditure amounting to ₹ 42,22,857/- in relation to this is disallowed The finding of the ld. CIT(A) is not rebutted by revenue by placing any contrary materials
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