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2018 (1) TMI 1029 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D(2) of the Rules - Held that:- It is the duty of the Ld. AO first to record satisfaction having regard to accounts of the assessee that the claim made by the assessee with regard to non-incurrence of any expenditure for the purpose of earning income, is incorrect with cogent reasons thereon. Without recording such satisfaction, the Ld. AO cannot proceed to make disallowance u/s14A of the Act read with Rule 8D of the Rules. In these facts and circumstances, we hold that no disallowance u/s 14A of the Act could be made in the instant case. Accordingly, ground no. 1 raised by the assessee is allowed. Disallowance made towards leave encashment - Held that:- Hon’ble Calcutta High Court in the case of Exide Industries Ltd vs Union of India reported in (2007 (6) TMI 175 - CALCUTTA High Court) had struck down the provisions of section 43B(f) of the Act. Hon’ble Supreme Court [2008 (9) TMI 921 - SUPREME COURT] had not stayed the judgement of the Calcutta High Court during Leave proceedings. But the Hon’ble Supreme Court had only passed an interim order on the impugned issue. Hence we deem it fit and appropriate , in the interest of justice and fair play, to set aside this issue to the file of the ld AO to pass orders based on the outcome of the main appeal on merits by the Hon’ble Supreme Court as stated supra. Accordingly Ground No. 2 raised by the assessee is allowed for statistical purposes.
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