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2017 (11) TMI 371 - AT - Income TaxRevision u/s 263 - disallowance made by him U/s 14A - Held that:- For making any disallowance u/s.14A is to, firstly, examine the assessee’s claim of having incurred some expenditure or no expenditure in relation to exempt income if the Assessing Officer gets satisfied with the same, then there is no need to compute disallowance as per Rule 8D. It is only when the Assessing Officer is not satisfied with the correctness of the claim of the assessee in respect of such expenditure or no expenditure having been incurred in relation to exempt income, that the mandate of Rule 8D will operate. In the assessee's case under consideration, the Assessing Officer has satisfied about the expenditure in relation to exempt income, he has every kind of details with him. The Assessing Officer computed the disallowance under the Rule 8D(2)(ii) at Rs.Nil. Under Rule 8D (2) (iii), the Assessing Officer disallowed the amount of ₹ 7,67,500/- stating the expenses which are not related to normal business. Therefore, every kind of details and documents were available before the Assessing Officer and there was no any mistake on the part of the assessee. If the Assessing Officer takes a plausible view to disallow any expenditure then it cannot be said that order passed by him is erroneous and prejudicial to the interest of revenue. Therefore we are of the view that order passed by the ld. CIT U/s 263 is neither erroneous nor prejudicial to the interest of revenue. We accordingly quash the order u/s 263 of the Act and allow the appeal of the assessee.
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