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TMI Blog2014 (6) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has erred in deleting the disallowance of Commission of Rs. 47,00,000/- paid to Mr. Renu Munjal, Managing Director of assessee company." 3. We have heard the arguments of both the sides and perused relevant material placed before us. We find this issue to be covered in favour of the assessee by the decision of ITAT in assessee's own case for AY 2005-06 vide ITA No.4329/Del/2010 wherein the ITAT decided this issue in favour of the assessee. The above order of the ITAT was again followed by the ITAT in AY 2007-08 vide ITA No.3320/Del/2012. From a perusal of the order of the learned CIT(A), it is evident that he allowed the relief to the assessee following the above two decisions of ITAT. Since the issue is settled by the decision of ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e:- "How is s. 14A to be worked for the period prior to the introduction of r. 8D? 41. Sub-s.(2) of s. 14A, as we have seen, stipulates that the AO shall determine the amount of expenditure incurred in relation to income which does not form part of the total income "in accordance with such method as may be prescribed". Of course, this determination can only be undertaken if the AO is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. This part of s. 14A(2) which explicitly requires the fulfillment of a condition precedent is also implicit in s. 14A(1) (as it now stands) as also in its initial Avatar as s. 14A. It is only the prescription with regard to the method of determining such expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle, been now widened under s. 14A." So, even for the pre-r. 8D period, whenever the issue of s. 14A arises before an AO, he has, first of all, to ascertain the correctness of the claim of the assessee in respect of the expenditure incurred in relation to income which does not form part of the total income under the said Act. Even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income, the AO will have to verify the correctness of such claim. In case, the AO is satisfied with the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, the AO is to accept the claim of the assessee insofar as the quantum of disallowance under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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