TMI Blog2015 (9) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts nor in respect of claim of the appellant u/s 14A of the Act. In other words, the AO has not expressed satisfaction that the appellant’s claim u/s 14A is incorrect, a prerequisite for invoking the provisions of section 14A of the Act. In view of the aforesaid reasoning and findings we restrict the disallowance under sec.14A to be ₹ 1,39,39,685/-. - Decided in favour of assessee. - I.T.A .No.-5507/Del/2012 - - - Dated:- 28-8-2015 - SHRI T.S. KAPOOR AND SMT. BEENA PILLAI, JJ. For The Appellant : Sh. G.S. Grewal Mrs. Harsimran Grewal, CA For The Respondent : Smt. Parwinder Kaur, Sr. DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER: This is an appeal filed by the Assesee against the order of ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 8,69,481/- ii. Under Rule 8D(2)(ii) : ₹ 1,28,38,570/- iii. Under Rules 8D(2)(iii) : ₹ 90,69,798/- Total ₹ 2,27,77,769/- 3. Aggrieved by the disallowance the assessee preferred an appeal before the first appellate authority. The ld. CIT(A) confirmed the action of the AO and sustained the disallowance. Against the order of the ld. CIT(A), the assessee is now in appeal before us. 4. The ld. AR submitted before us that, the Appellant had earned exempt income of ₹ 17,62,49,648 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Rules, 1962. The ld. AR further submitted that the AO has neither expressed his satisfaction nor given cogent reasons before proceeding to disallow expenses u/s 14A of the Act. The ld. AR submits that the ld. CIT(A) has not followed the parameters laid down by the decision of the Hon ble Delhi High Court in the case of Maxopp Investments Limited, reported in 374 ITR 272 (2012). He further submits that the issue stands covered in the appellant own case for the A.Y. 2008-09, vide order dated 13/02/2015 reported in 68 SOT 332 (Del.) (Trib.). 7. On the other hand, the ld. DR present supported the stand of the CIT (A) on the issue. The Ld. D.R. placed reliance on the decision of coordinate bench in the case of T T Motors Ltd., in ITA n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so find that the AO has neither recorded his satisfaction nor given reasons as to how the claim of expenditure in relation to tax free income has not been correctly made by the assessee as envisaged under section 14A(2) and has mechanically invoked Rule 8D. Sub-section (2) of section 14A of the Act provides the manner in which the AO is to determine the amount of expenditure incurred in relation to income, which does not form part of the total income. 10. The requirement of the AO embarking upon a determination of the amount of expenditure incurred in relation to exempt income would be triggered only if the AO records a finding that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 272 /[2011] 203 Taxman 364/15 taxmann. Com 390 (Delhi). 11. It is seen that the appellant company itself has made the disallowance of expenditure u/s 14A r.w.r. 8D of ₹ 1,39,39,685/. The claim of disallowance made by the appellant company was examined by the AO during the course of assessment. The appellant produced the books of accounts and the evidences, which the ld. Assessing Officer had verified the ld. AO examined the books of accounts, evidences and records of the appellant and verified the voluntary disallowance by appellant u/s 14A of the Act. The AO has not pointed out any deficiency in the books of accounts nor in respect of claim of the appellant u/s 14A of the Act. In other words, the AO has not expressed satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y expenditure that could be disallowed against the exempt income received by the assessee therein. The Hon ble coordinate bench has recorded in para 5 therein that the assessee had incurred certain expenses which was attributable to the earning of exempt income. However in the facts of the present case before us, the assessee has suo mote disallowed expenses under section 14A of the Act. The Ld. D.R, contended that in the event there are any deficiency left by the A.O in recording proper satisfaction, the same can be made good by the Ld. CIT(A). In the facts of the present case the Ld. CIT(A) has not compensated for the deficiency by the A.O in recording proper satisfaction. 14. It is also observed in the facts of the present case that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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