Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 1119 - AT - Income TaxDisallowance u/s 14A r.w.s 8D - assessee has made suo motto disallowance - HELD THAT:- AO noted only general observation and proceeded to disallow under Rule 8D of the Rules. We do not find any reference to nature of expenditure incurred by the assessee and quantum of expenditure disallowed by the assessee with regard to books of accounts that how it is it inadequate or incorrect. Merely noting general observations does not satisfy requirement of section 14A (2) - Thus, we hold that the AO has failed to record satisfaction about incorrectness of voluntarily disallowance offered by the assessee on examination of the accounts, that it is incorrect. AO does not have authority to invoke the provisions of Rule 8D of the Rules without recording satisfaction. Satisfaction of the ld AO mandated u/s 14A (2) is the entry gate for invoking computation of disallowance u/r 8D . In assessee’s own case similar issue is decided by the coordinate bench in earlier years. Therefore, in absence of any such satisfaction no disallowance under Section 14A of the Act - AO is directed to retain the disallowance offered by the assessee under Section 14A of the Act. Accordingly, ground no. 1 (a) of the appeal is allowed. Claim of TDS credit - HELD THAT:- The assessee has shown a tax deduction at source made by tax deductor which has been paid to the credit of Central Government by the various parties. However, assessee has submitted the list of 16 such parties where the amount of income has been offered by the assessee as income however, consequent TDS was not granted as credit to the assessee. The reason being that it did not appear in form no. 26AS of the assessee. If the assessee proves that such tax has been deducted by the parties but it has not been reflected in the form no. 26AS, this issue has been considered by CBDT in office memo dated 11th March 2016. In paragraph no. 3, the CBDT has directed the officers not to enforce demand arising in such circumstances. Further, merely because the tax deductor has not filed the TDS return there is enough mechanism available to catch hold of such defaulting tax deductor. No doubt, it is the duty of the assessee to show that tax has been deducted. This issue is squarely covered in favour of the assessee by the decision of the Hon'ble Gujarat High Court in case of Kartik Vijaysinh Sonavane [2021 (11) TMI 682 - GUJARAT HIGH COURT] Therefore, this issue is restored to the file of the learned Assessing Officer for limited purpose of verification and thereafter to grant credit of the same. Further a sum where the tax deduction at source could not be reconciled. This issue is also restored to the file of the learned Assessing Officer with a direction to the assessee to show that how such TDS is refundable from credit is available to the assessee. Accordingly, ground no. 2 of the appeal is partly allowed.
|