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2015 (8) TMI 1077 - ITAT DELHIDisallowance u/s 14A r.w.r. 8D - CIT(A) deleted disallowance - Held that:- AO without recording his satisfaction that the claim of expenditure in relation to tax free income has not been correctly made by the assessee as envisaged under section 14A(2) has invoked Rule 8D.While rejecting the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, in relation to exempt income, the AO would have to indicate cogent reasons for the same. It is, therefore, clear that determination of the amount of expenditure in relation to exempt income under Rule 8D would only come into play when the AO rejects the claim of the assessee in this regard. (Maxopp Investment Ltd. v. CIT (2011 (11) TMI 267 - Delhi High Court ). The ld CIT(A) has rightly observed that the AO did not find any deficiency in the books of account nor any deficiency in respect of the claim of the assessee u/s 14A of the Act. We also find that the AO has not expressed satisfaction with the assessee's claim u/s 14A was incorrect and which is a sine quo none before invoking provisions of section 14A of the Act. We do not find any infirmity whatsoever in the reasoned order passed by the ld CIT(A) and therefore we are inclined to confirm the order of the ld CIT(A) - Decided in favour of assessee.
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