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2016 (10) TMI 421 - ITAT MUMBAIDisallowance u/s 14A - Held that:- On perusal of the orders, we find that by invoking the provisions of section 14A r.w.r 8D, the AO has not at all commented on the disallowance of ₹ 2,50,000/- which was made by the assessee suo mottu for earning exempt income. We are of the considered opinion that invoking the provisions of section 14A r.w.r 8D without recording the satisfaction by the AO is wrong and accordingly the order of the ld.CIT(A) by upholding the action of AO cannot be sustained. We find that in the case of Kalyani Steels Ltd (2014 (2) TMI 661 - ITAT PUNE), the co-ordinate Bench of the Tribunal has held that non recording satisfaction with regard to the correctness of the claim of the assessee which is a mandatory requirement in terms of section 14A of the Act r.w.r 8D to compute the impugned disallowance is untenable in law. In the assessee’s case also, we find that no satisfaction has been recorded as regard the invoking of the provisions of section 14A r.w.r 8D, and therefore application of section 14A r.w.r.8D is not correct as the necessary satisfaction in terms of section 14A(2) of the Act has not been recorded. Following the ratio laid down in the decision of the Tribunal (supra), we set aside the order of the ld.CIT(A) and direct the AO to delete the addition. This ground is allowed. Disallowance while computing the book profit u/s 115JB of the Act. Since the issue regarding disallowance made u/s 14A r.w.r.8D has been allowed by us, the issue raised in ground no.2 is also allowed in favour of the assessee by directing the AO to delete the addition made u/s 115JB of the Act.
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