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2015 (10) TMI 752 - HC - Income TaxDisallowance on account of invoking Rule 8D read with Section 14A - ITAT confirmed CIT(A)order in deleting the disallowance - Held that:- AO has indeed proceeded on the erroneous premise that the invocation of Section 14A is automatic and comes into operation as soon as the dividend income is claimed exempt. See Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax [2011 (11) TMI 267 - Delhi High Court] wherin held the prescribed method being the method stipulated in rule 8D of the said Rules. 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 Assessing Officer would have to indicate cogent reasons for the same. In CIT v. Taikisha Engineering India Ltd.(2014 (12) TMI 482 - DELHI HIGH COURT ), in similar circumstances, the Court disapproved of an AO invoking Section 14A read with Rule 8D (2) of the Rules without recording his satisfaction and noted that the recording of satisfaction as to why "the voluntary disallowance made by the assessee was unreasonable and unsatisfactory" is a mandatory requirement of the law. - Decided against revenue.
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