2019 (10) TMI 466

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..... well as absence of any expenditure incurred in relation to earning exempt income. 2. The assessee has raised the following grounds of appeal:- "1. That the Commissioner of Income Tax (Appeals) ["CIT(A)"] erred on facts and in law in upholding disallowance of Rs. 2,34,213 made by the assessing officer under section 14A of the Income tax Act, 1961 ("the Act") read with Rule 8D of the Income Tax Rules, 1962 ("the Rules"). 1.1. That the CIT(A) erred on facts and in law in upholding the aforesaid disallowance without appreciating that mandatory satisfaction about expenditure having been actually claimed/ incurred in relation to earning of exempt income, was not recorded by the assessing officer. 1.2. That the CIT(A)/ assessing officer er .....

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..... re u/s 14A of the Act applying Rule 8D, consequently, assessment order u/s 143(3) of the Act was passed on 25.03.2015. 4. That order was challenged by the assessee before the ld CIT (A). Ld CIT(A) confirmed the above addition for the reason that in earlier years the orders passed by the ld CIT(A) for Assessment Year 2010-11 on identical issue has been accepted by assessee. She further confirmed the addition on the merits. With respect to the satisfaction of the ld AO she held that para 3.7 of the order the ld AO has recorded the satisfaction correctly. The assessee aggrieved with the order has preferred an appeal before us. 5. The ld AR submitted that ld AO failed to record any satisfaction with respect to the explanation of the assessee .....

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..... 0/- was claimed. The ld AO without pointing out any instance of expenditure incurred by the assessee with regard to books of account of the assessee, adopted the disallowance computation u/r 8D of the IT Rules. Ld AO could not show that any of the expenditure is incurred for earning exempt income. Para 3.7 of the AO is merely a bald satisfaction of general expenses which by no stretch of imagination can be said to a proper satisfaction in terms of section 14 A (2) of the Act. Further the donation expenses of Rs. 801000/- is not an allowable expenses so no disallowance can be made out of it.. The depreciation of Rs. 199694/- cannot be held to be an expenditure but a claim of depreciation, hence, in view of the decision of the special bench [ .....

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