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2017 (8) TMI 1320 - HC - Income TaxAddition u/s 14A - Held that:- This issue is squarely covered by the decision of Bombay High Court in Godrej & Boyce MFG. Co. Ltd. vs. Deputy Commissioner of Income Tax & anr. reported [2010 (8) TMI 77 - BOMBAY HIGH COURT] also confirmed by SC [2017 (5) TMI 403 - SUPREME COURT OF INDIA] wherein held Sub-sections (2) and (3) of Section 14A of the Act read with Rule 8D of the Rules merely prescribe a formula for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Whether such determination is to be made on application of the formula prescribed under Rule 8D or in the best judgment of the Assessing Officer, what the law postulates is the requirement of a satisfaction in the Assessing Officer that having regard to the accounts of the assessee, as placed before him, it is not possible to generate the requisite satisfaction with regard to the correctness of the claim of the assessee. It is only thereafter that the provisions of Section 14A(2) and (3) read with Rule 8D of the Rules or a best judgment determination, as earlier prevailing, would become applicable. No mention of the reasons which had prevailed upon the Assessing Officer, while dealing with the Assessment Year 2002-2003, to hold that the claims of the Assessee that no expenditure was incurred to earn the dividend income cannot be accepted - Decided against revenue
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