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2019 (4) TMI 691 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - disallowance suo-motu by the assessee - absence of recording of dissatisfaction on the correctness of the claim of the assessee of expenditure in relation to exempt income - CIT(A) has deleted the addition, mainly on the ground that no dissatisfaction as to the correctness of the claim of the assessee of expenditure incurred in relation to the exempt income, has been recorded either expressly or otherwise - HELD THAT:- AO has noted that the assessee has not incurred any expenditure to earn the dividend income. This finding of the AO itself is not correct as while computing the addition in the computation portion of the assessment order, he himself has reduced the disallowance of ₹ 2,72,248/- out of disallowance computed on the basis of Rule 8D. Thus, it is evident that the Assessing Officer has not examined the correctness of the claim of the assessee of expenditure incurred in relation to exempt income. In absence of recording of dissatisfaction on the correctness of the claim of the assessee of expenditure in relation to exempt income, which is a prerequisite for invoking the Rule 8D of the Rules, the Assessing Officer is not justified in making the disallowance under Section 14A of the Act, invoking Rule 8D of the Rules. No infirmity in the order of the Ld. CIT(A) on the issue-in-dispute and accordingly, we uphold the same. The Grounds of the appeal of the Revenue are dismissed.
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