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2019 (9) TMI 1501 - AT - Income TaxRecognition of income - addition being interest on mobilization advance - assessee is following mercantile system of accounting and, therefore, the amount should have been recognized by the assessee as income for the impugned assessment year on accrual basis - HELD THAT:- As decided in own case for A.Y 2008-09 [2016 (1) TMI 1456 - ITAT DELHI] has deleted the addition held as that the entire matter is contentious in the sense that the third party - RPCL - which was awarded the contract claimed that it had performed it in accordance with the agreement with the parties. The assessee, however, felt otherwise and terminated the contract. There could be several likely outcomes in these proceedings - many of them possibility impinging upon the rights of the assessee to receive advance amount itself along with interest either in whole or in part. In these circumstances, the ITAT’s conclusions that there was no crystallized right to receive any particular amount or amounts, cannot be faulted. Addition u/s 14A r.w.r. 8D - expenditure incurred for earning the tax free income - HELD THAT:- We find the Tribunal vide ITA [2017 (4) TMI 1528 - ITAT DELHI] 24.04.2017 while deleting the disallowance stating According to the provisions of section 14A(2), the Ld. assessing officer before invoking the applicability of Rule 8D should have explained as to why the voluntary disallowances or no disallowances made by the assessee was unreasonable and unsatisfactory. We failed to find any such satisfaction recorded by the Ld. assessing officer. The satisfaction is mandatory in view of the judicial precedents of the jurisdictional High Court laid down before us by the Ld. authorized representative. Therefore, we delete the disallowance under section 14A of the income tax act applying the provisions of Rule 8D. Appeal filed by the assessee is allowed.
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