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2020 (7) TMI 338 - HC - Income TaxDisallowance u/s 14A - whether the tribunal was right in coming to the conclusion that the Assessing Officer has not recorded his mandatory satisfaction as required u/s 14A(2)? - HELD THAT:- AO after going through the submission made by the petitioner pointed out that the assessee had computed the disallowance of dividend by invoking the provisions of Rule 8D, but while doing so, ignored sub rule iii of the said rule. It appears that this was pointed out to the assessee. Assessee though filed a response on 09.01.2014, the Assessing Officer states that the assessee did not address the issue of computation of the third limb of Rule 8D. The finding recorded by the AO is sufficient and a clear indication of his compliance of the procedure under Section 14A(2), the AO at the first instance has considered whether the claim of the assessee is correct and thereafter only has proceeded to determine the amount by adopting the procedure under Rule 8D. For assessment year 2011-12 - it cannot be stated to be the case where there is a failure to follow the procedure under Section 14A (2) So far as the order passed for the assessment year 2012-13 on a closer reading of impugned order, we find that though the tribunal directs the assessee to work out the expenditure component towards administrative and managerial aspect so that the same shall be disallowed in the computation of income, but has not issued any specific directions to the AO as to what has to be done after the assessee files the working sheet. Therefore, to that extent the tribunal has committed an error. Hence, we are of the considered view that the matter should be remanded for fresh consideration of the Assessing Officer in accordance with law. - Decided in favour of revenue.
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