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2015 (2) TMI 991 - HC - Income TaxDisallowance u/s 14A - assessee/appellant had declared tax free dividend income to the tune of ₹ 2,71,83,864/- - Held that:- The statutory disallowance mandated by Section 14A - the procedure to which - has been subsequently spelt out in Rule 8D, has been interpreted in Maxopp [2011 (11) TMI 267 - Delhi High Court] and Taikisha (2014 (12) TMI 482 - DELHI HIGH COURT) in a particular manner, i.e., that the AO would first needs to be satisfied as to the assessees explanation, or its absence [see Section 14A (3)] before coming to the conclusion that some expenditure was in fact incurred or deemed to have been incurred. Though the grounds of appeal in the CIT (A) proceedings do not expressly spell out this aspect, it cannot be denied that this matter was agitated before the CIT (A) for hearing as well as before the ITAT. At the same time, this Court notices that in both Maxopp and Taikisha, and the ultimate order made by both the Division Benches was to remit the matter for fresh consideration by the AO. Perhaps this was necessitated by the fact that the interpretation of Section 14A - guided by Rule 8D was in the light of the decision in Godrej and Boyce Mfg. Co. Ltd. vs. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] and the fact that the Rule 8D was brought in later, i.e., w.e.f. AY 2008-09 - Thus matter is remitted to the Assessing Officer for consideration whether, in fact, there was any necessity for invoking the Section 14A (3) read with relevant part of Rule 8D - Decided in favour of assessee for statistical purposes.
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