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2018 (2) TMI 1629 - AT - Income TaxAssessment framed u/s 153A - Disallowance made u/s 14A - quantum of disallowance - Held that:- Once it is an unabated assessment, then the addition which can be made in the assessment framed u/s 153A would only be with regard to incriminating material or document found during the course of search. This principle is now well settled by catena of judgments including those of Hon’ble Jurisdictional High Court in the case of Kabul Chawala (2015 (9) TMI 80 - DELHI HIGH COURT) and Meeta Gutgutia (2017 (5) TMI 1224 - DELHI HIGH COURT). The AO has mainly resorted to make adhoc estimate of ₹ 5 lacs which admittedly is not based on any material or evidence found during the course of search but merely on the perusal of the records/ balance sheet already considered by the AO. Thus, the disallowance of ₹ 5 lacs made in the assessment year 2005-06 is directed to be deleted. For the assessment year 2011-12, it is an admitted fact that the assessee has earned dividend income of ₹ 14,028/- only and as against this the Ld. AO has proceeded to make the disallowance at ₹ 3,69,090/- after applying rule 8D mechanically disallowance of expenditure u/s 14A cannot exceed the exempt income. Accordingly, we direct the AO to delete the disallowance made over and above what has been offered by the assessee for the purpose of disallowance u/s 14A
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