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2018 (12) TMI 1920 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Mandation of recording satisfaction - HELD THAT:- Whether it is obligatory on the part of the A.O to record his satisfaction as to why the claim of the assessee in respect of the expenses incurred for earning of the exempt dividend income was not to be accepted is no more res integra and has been settled by the Hon’ble Supreme Court in the case of Godrej & Boyce Manufacturing Company Ltd. Vs. DCIT & Anr.[2017 (5) TMI 403 - SUPREME COURT] The Hon‟ble Apex Court in its aforesaid order had observed that it is obligatory on the part of the A.O to record his satisfaction that having regard to the accounts of the assessee as placed before him, it was not possible to generate the reasonable satisfaction with regard to the correctness of the claim of the assessee - It was observed by the Hon‟ble Apex Court that it was only after the A.O had recorded his dissatisfaction as regards the correctness of the claim of the assessee that the provisions of Sec.14A(2) and (3) r.w. Rule 8D could be invoked. Claim of the assessee as regards the expenditure incurred in relation to income which does not form part of the total income under the I.T Act was rejected by the A.O in the assesses own case for the immediately preceding year viz. A.Y. 2011-12. However, on appeal the Tribunal had vacated the disallowance that was made by the A.O under Sec. 14A r.w. Rule 8D de hors recording of such satisfaction on his part, by relying on the judgment of the Hon‟ble Supreme Court in the case of Godrej & Boyce Manufacturing Company Ltd. Vs. DCIT & Anr.[ supra] - Decided in favour of assessee.
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