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2019 (3) TMI 1032 - AT - Income TaxAddition u/s 14A - Expenses incurred for earning dividend income - assessee itself suo moto made the disallowance - recording proper satisfaction - HELD THAT:- The undisputed position that emerges is that the assessee had offered suo-moto disallowance of ₹ 3 Lacs against the exempt income. AO, without recording proper satisfaction as envisaged by Section 14A read with Rule 8D, proceeded to apply Rule 8D, which was not in accordance with law. The onus was on AO to reject the assessee’s computations and record a finding, having regard to accounts of the assessee, as to how those computations were not satisfactory. The failure to do so oust the jurisdiction of AO to apply Rule 8D. Another factor to be noted is that the said disallowance, considering exempt income yielding investments works out to ₹ 3.75 Lacs, against which the assessee has already offered suo-moto disallowance of ₹ 3 Lacs. Therefore, the net additional disallowance of ₹ 5.52 Lacs could not be sustained. - Decided in favour of assessee.
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