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2018 (12) TMI 1216 - HC - Income TaxDisallowance made under section 14A read with rule 8D(2)(iii) - whether neither the assessing authority nor the Dispute Resolution Panel (DRP) has recorded specific finding as to whether the assessee has incurred specific expenditure or not even when the ingredients of section 14A are satisfied in the case of the assessee? - Held that:- As decided in case of M/S. ADVAITH MOTORS PVT. LTD. [2018 (6) TMI 1469 - KARNATAKA HIGH COURT] disallowance under Section 14A cannot be a wild guesswork bereft of ground realities. It has to have a reasonable and close nexus with the factually incurred expenses. It is not deemed disallowance under Section 14A of the Act but an enabling provision for assessing authority to compute the same on the given facts and figures in the regularly maintained Books of Accounts. The assessing authority also could not have called upon the Assessee himself to undertake the exercise of computing the disallowance under Section 8D of the Rules. Such abdication of duty in not permissible in law. Since no such exercise has been undertaken by the assessing authority, the case calls for a remand. See Commissioner of Income Tax & Anr. Vs. Microlabs Ltd., [2016 (4) TMI 219 - KARNATAKA HIGH COURT]. Also this court in a recent judgment in Principal CIT v. Softbrands India P. Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] has held that in these types of cases, unless an ex facie perversity in the findings of the learned Income-tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under section 260A of the Act is not maintainable. - decided in favour of assessee.
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