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2019 (8) TMI 928 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - assessee disallowed aforesaid expenses by applying 0.5% of the average investments - HELD THAT:- The onus is on the assessee to bring on record, the details of modus operandi adopted by it for making investments, arranging its affairs and managing investments which ought to be firstly brought by assessee before the AO in discharge of primary onus as is cast on the assessee. No such details are filed before us to prove that the assessee discharged its primary onus. The assessee rather made suo motu disallowance of expenditure u/s 14A, accepting and admitting applicability of Section 14A. It applied of its own 0.5% of average investments for making disallowance u/s 14A of the 1961 Act by invoking Rule 8D(2)(iii) of the 1962 Rules, towards administrative expenses. Now, to resile from its own admitted position at this stage is not warranted. AO on its part has duly recorded satisfaction albeit cryptic. AO is directed to make disallowance of expenditure u/s 14A in accordance with our aforesaid directions. The assessee is directed to file complete details and modus operandi for making and managing investments to that effect before the AO in denovo proceedings. AO shall grant proper and adequate opportunity of being heard to the assessee in denovo assessment proceedings and the evidences submitted by the assessee in its defence shall be admitted by the AO. We direct the AO make to disallowance of expenditure u/s. 14A in accordance with our aforesaid directions.
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