TMI Blog2019 (5) TMI 1714X X X X Extracts X X X X X X X X Extracts X X X X ..... s required in law was recorded by the Assessing Officer prior to invoking Rule 8D of the I.T. Rules. Hence we delete the disallowance u/s 14A and allow this appeal of the assessee. Undisclosed interest income - assessee s contention is that the amounts, in question, was held by him as a trustee, in an escrow account, consequent to the orders passed by the Hon ble Supreme Court in the legal proceedings - HELD THAT:- . We agree with the submissions of the assessee. In such facts no income can be brought to tax in the hands of the assessee. Never the less this issue requires enquiry to verify as to whether the assessee is merely a custodian of the funds under the directions of Hon ble Court or not. Thus for the limited purpose, we set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer as well as ld. CIT(A) noted that the assessee chose not to respond either before the Assessing Officer or before the ld. CIT(A). Aggrieved the assessee is in appeal before us on the following grounds: 1. That the ld. Commissioner(Appeals) has erred in upholding the disallowances to the tune of ₹ 5,64,869/- made by the Assessing Officer by invoking section 14A read with Rule 8D(2)(iii) of the I.T. Acts and Rules. 2. That the ld. Commissioner (Appeals) erred in upholding the addition made by the Assessing Officer of an amount of ₹ 6,61,606/- as undisclosed interest income of the appellant. 4. We have heard Mr. Ajay Gaggar, ld. Counsel for the assessee and Shri Robin Choudhury, Addl. CIT, ld. Sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 25,000/-). The Hon ble Supreme Court in Maxopp Ltd. 402 ITR 401 (SC) has held that satisfaction needs to be recorded by the A.O and as observed earlier in this paragraph, the A.O had duly recorded his satisfaction and hence the A.O s action cannot be held as unjustified. As regards quantum of the disallowance, the A.O has rightly followed Rules prescribed in the IT Rules, 1962 and particularly Rule 8D(2)(iii) has been invoked and I find no reason to differ with the disallowance so made by the A.O. Hence this ground of the appellant is treated as disallowed. 7. In our view, the A.O has not recorded satisfaction as required in law, prior to invoking Rule 8D of the I.T. Rules for the purpose of disallowance u/s 14A of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer prior to invoking Rule 8D of the I.T. Rules. Hence we delete the disallowance u/s 14A and allow this appeal of the assessee. 9. Ground No.2 is against the addition made by the A.O on the ground that the assessee earned undisclosed interest. The assessee s contention is that the amounts, in question, was held by him as a trustee, in an escrow account, consequent to the orders passed by the Hon ble Supreme Court in the legal proceedings. It was submitted that he has merely a custodian of the amounts and the amounts are returned back, along with interest accrued, to the respective parties upon direction by the Hon ble Supreme Court. In other words it is the case of the assessee that the income from interest in question does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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