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2018 (5) TMI 941 - AT - Income TaxAssessment u/s 153A - Disallowance u/s 14A - Held that:- We find that the A.Y. 2009-10 falls in the category of ‘completed assessments’. It is an admitted position that no incriminating material was found during the course of search concerning the disallowance u/s 14A of the Act. In that view of the matter, the assessment cannot embrace any fresh disallowance otherwise than supported by any incriminating material found during the course of search. In such a situation, the originally determined income has to be repeated in the assessment u/s 153A of the Act. As there is no mention of any disallowance having been made in the original assessment u/s 143(3) of the Act in any of the orders of the authorities below, we hold that the disallowance to be deleted. Disallowance u/s 14A - Held that:- Only where the assessee offers some disallowance u/s 14A with which the Assessing Officer is not satisfied, that he needs to record a proper satisfaction before proceeding to make disallowance u/s 14A. If, on the other hand, the assessee does not offer any disallowance u/s 14A, the requirement of recording satisfaction by the Assessing Officer will be dispensed with. The facts of our case are covered by the mandate in this case inasmuch as the assessee had not offered any disallowance u/s 14A of the Act. In view of the fact that the Assessing Officer properly recorded satisfaction u/s 14A of the Act, despite there being no such requirement as laid down by the Hon'ble Supreme Court in the case of Maxopp Investments Ltd. [2018 (3) TMI 805 - SUPREME COURT OF INDIA], we are convinced that the ld. AR’s contention on this aspect deserves to be jettisoned. We order accordingly. Disallowance u/s 14A gets restricted to the extent of exempt income, even if the provisions of the section are attracted. In view of the above precedents, which are squarely applicable to the facts of the instant case, we limit the disallowance to the extent of exempt income of ₹ 7,72,918/-. The impugned order is modified pro tanto.
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