Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2024 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 407 - HC - Income TaxAddition u/s 14A r.w.r.8D - AO mandation to record dis-satisfaction with the correctness of the Assessee's claim regarding expenditure related to exempt income - HELD THAT:- We agree with the finding of the CIT(A) and the ITAT that though the AO has stated that Assessee’s explanation is not acceptable, he has not given reasons why it was not acceptable to him. Subsection (2) of Section 14A and Rule 8D provides that if the AO is not satisfied with the correctness of the claim in respect of expenditure made by Assessee in relation to income which does not form part of the total income under the Act, he shall determine the amount of expenditure in relation to such income in accordance with the provisions prescribed. The most fundamental requirement, therefore, is the Assessing Officer should record his dissatisfaction with the correctness of the claim of Assessee in respect of the expenditure and to arrive at such dissatisfaction, he should give cogent reasons. See JSW Energy Limited. [2023 (6) TMI 1223 - BOMBAY HIGH COURT] The order of the ITAT (Panaji Bench) in the case of Sesa Goa Limited [2013 (9) TMI 233 - ITAT PANAJI] has been upheld by the Goa Bench of this Court in CIT, Goa v. Sesa Goa Limited, Panaji, Goa [2021 (5) TMI 466 - BOMBAY HIGH COURT] where the Division Bench concurred with the view taken by the ITAT that the AO did not record his satisfaction why the disallowance made by Assessee was incorrect. Assessee appeal allowed.
|