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2021 (3) TMI 176 - HC - Income TaxDisallowance u/s 14A r.w.r. 8D - ITAT deleted the addition made holding that disallowances made u/s 14A cannot exceed the exempt income - whether ITAT is right in not appreciating the CBDT Circular No. 5/2014 wherein it's clarified that, disallowance u/s 14A r.w.r 8D has to be made even if the tax payer in a particular year not earned any exempt income? - HELD THAT:- Substantial questions of law raised by the Revenue in these appeals have been decided against the Revenue in M/s.Tidel Park Limited.[2020 (7) TMI 339 - MADRAS HIGH COURT] AO must, in the first instance, determine whether the claim of the assessee in that regard is correct and the determination must be made having regard to the accounts of the assessee. The satisfaction of the AO must be arrived at on an objective basis. It is only when the AO is not satisfied with the claim of the assessee, that the legislature directs him to follow the method that may be prescribed. Sub-s. (3) of s. 14A provides for the application of sub-s. (2) also to a situation where the assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under the Act. See GODREJ AND BOYCE MFG. CO. LTD [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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