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2018 (4) TMI 1573 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - CIT(A) restricted the disallowance u/s 14A of the Act to the tune of ₹ 9,47,339/-, being 10% of dividend income - Held that:- The ld. AO in the instant case, had applied the third limb of Rule 8D(2) of the Rules and made disallowance of ₹ 38,93,332/-. The assessee has made suo-moto disallowance in its return of income in the sum of ₹ 12,881/- towards demat charges. The ld. CITA had restricted the total disallowance of ₹ 9,47,339/- being 10% of dividend income over and above the figure of ₹ 12881/- suo-moto disallowed by the assessee. We find that the ld. AO cannot directly resort to the computation mechanism provided in Rule 8D(2) of the Rules for the purpose of making disallowance u/s 14A of the Act. - It is incumbent on the part of the ld AO to verify the accounts of the assessee and ascertain the amount of disallowance from the said accounts u/s 14A of the Act. - Matter remanded back to AO.
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