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2016 (6) TMI 1166 - ITAT DELHIDisallowance u/s 14A - Held that:- The assessee, vide reply dated 13th October, 2011, furnished the explanation saying that no expenditure was incurred for earning of exempt income. He has also relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Hero Cycles Ltd. [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT] so as to buttress its claim that the expenditure can be disallowed u/s 14A only if it is clearly identified to be incurred for the purpose of earning exempt income. He also submitted the statement of calculation under Rule 8D as was directed by the Assessing Officer. The Assessing Officer did not at all consider the assessee's submission and simply worked out the disallowance as per Rule 8D. Thus, there is no finding by the Assessing Officer that he is not satisfied with the claim of the assessee that it incurred an expenditure of ₹ 1,000/- for earning of exempt income. Without recording such satisfaction, the Assessing Officer cannot proceed to work out the disallowance under Rule 8D as per Section 14A(2) of the Act. We, therefore, delete the disallowance sustained by learned CIT(A) u/s 14A amounting to ₹ 89,650/-. Disallowance of club expenses - non incurred for the purpose of business - Held that:- During the course of hearing before us, learned DR pointed out that this ground of appeal was not pressed by the assessee at the time of hearing before the learned CIT(A). On perusal of the order of learned CIT(A), we find his submission to be correct. No reason has been given by the assessee that when the assessee has not pressed the disallowance of club expenses before the learned CIT(A), how it is aggrieved with the order of learned CIT(A) in this regard. Accordingly, we do not find any justification to interfere with the order of learned CIT(A) in this regard and reject ground of the assessee's appeal.
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