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2017 (6) TMI 345 - AT - Income TaxDisallowance of expenses u/s 14A - necessity of recording of satisfaction - Held that:- AO while proceeding with disallowing the expenses has not recorded any satisfaction as required u/s 14A(2) of the Act. As per Sec.14A(2), for invocation of Rule 8D, the AO has to record satisfaction about the correctness of the claim of the assessee, in respect of the expenditure incurred in relation to the income which does not form part of total income. In the present case, we find that no satisfaction has been recorded by the AO while disallowing the expense u/s 14A of the Act, thus disallowance u/s 14A r.w.r. 8D was unjustified. See Punjab Tractors Ltd., Vs. CIT [2017 (2) TMI 647 - PUNJAB AND HARYANA HIGH COURT] - Decided in favour of assessee.
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