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2019 (5) TMI 1714 - AT - Income TaxDisallowance u/s 14A read with Rule 8D(2)(iii) - assessee had suo moto made the disallowance - HELD THAT:- AO had not applied his mind to the facts of this case. When the assessee had disallowed ₹ 25,000/- suo moto, the Assessing Officer proceeds on a presumption that no disallowance was made by the assessee. What the Assessing Officer had to record, is his satisfaction that the suo moto disallowance made by the assessee is, in his opinion, not correct or justified on the particular set of facts. It is not the case of the assessee that section 14A is not applicable to his case as alleged by the Assessing Officer. Thus no proper satisfaction as required in law was recorded by the Assessing Officer prior to invoking Rule 8D of the I.T. Rules. Hence we delete the disallowance u/s 14A and allow this appeal of the assessee. Undisclosed interest income - assessee’s contention is that the amounts, in question, was held by him as a trustee, in an escrow account, consequent to the orders passed by the Hon’ble Supreme Court in the legal proceedings - HELD THAT:- . We agree with the submissions of the assessee. In such facts no income can be brought to tax in the hands of the assessee. Never the less this issue requires enquiry to verify as to whether the assessee is merely a custodian of the funds under the directions of Hon’ble Court or not. Thus for the limited purpose, we set aside the matter to the file of A.O for fresh adjudication in accordance with law. The assessee is directed to appear before the ld. Assessing Officer and cooperate in the matter by producing all evidences, as may be directed by the Assessing Officer, in support of his claim. This ground is allowed for statistical purposes.
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