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2016 (4) TMI 463 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - Held that:- We find that the assessee has earned exempt income to the tune of ₹ 17,56,369/- and has suo motu disallowed ₹ 61,666/- u/s 14A of the Act. We find that the AO has invoked Rule 8D without pointing out any reason for not being satisfied with the computation made by the assessee in respect of expenditure incurred for earning exempt income. The Hon’ble jurisdictional High Court in CIT vs. Tikisha Engineering India Ltd. (2014 (12) TMI 482 - DELHI HIGH COURT ) has held that without recording the objective satisfaction as required under sub-section (2) to section 14A that the AO is not satisfied with the correctness of the claim of the assessee in respect of expenditure in respect of exempt income, the AO cannot invoke Rule 8D to compute the said disallowance under the said Rule. Therefore, we find substance in the argument of the ld. AR and so, we find that without recording satisfaction as envisaged by the statute before invoking the computation provided for under Rule 8D has vitiated the impugned order. Therefore, we direct deletion of the addition made by the AO and which was sustained by the CIT (A) in his impugned order. - Decided in favour of assessee
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