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2015 (7) TMI 741 - DELHI HIGH COURTDisallowance u/s 14A r.w.r. 8D - Held that:- Relying on the decisions in Maxopp Investments Limited v. Commissioner of Income Tax [2011 (11) TMI 267 - Delhi High Court] and Auchtel Products Limited v. ACIT (2012 (5) TMI 108 - ITAT, MUMBAI) the ITAT came to the conclusion that it was incumbent on the AO to have recorded that he is not satisfied with the correctness of the claim of the Assessee in respect of such expenditure which did not part of the income. It was held that in order to disallow the expenditure under Section 14A there must be a live nexus between expenditure incurred and income not forming part of total income. Consequently, the ITAT came to the conclusion that the disallowance made by the AO was not justified. Learned counsel for the Appellant has sought to rely on the Circular No. 5 of 2014 dated 11th February 2014 whereby the CBDT issued a clarification that for invoking disallowance under Section 14A of the Act it is not material that the Assessee should have earned such exempted income during the financial year under consideration. She candidly admitted that the said circular was not placed before the ITAT in the appeal filed by the Revenue. The Court is not prepared to permit the Appellant to urge a ground that was not raised before the ITAT. - Decided in favour of assessee.
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