2017 (12) TMI 1768 - HC - Income Tax

Disallowance u/s 14A (2) - AO disallowed certain amounts after rejecting the assessee s explanation with respect to the statutory disallowance on an application of Rule 8D of the Income Tax Rules - Commissioner granted the relief which was confirmed by the ITAT - HELD THAT - The issue in the opinion of this Court is now covered by the judgment of the Supreme Court in Godrej Boyce Manufacturing Co. Ltd. v. DCIT 2017 (5) TMI 403 - SUPREME COURT . In that judgment the Court confirmed the opinion of various High Courts bringing to tax any amount under Section 14A and applying the Rule 8D the Assessing Officer has to record prima facie satisfaction that the claim of the assessee is inadmissible. In the present case no such satisfaction was recorded. The ITAT s conclusions are therefore justified. No substantial question of law arises

Summary

The High Court dismissed the Revenue's appeal regarding disallowance under Section 14A (2) as the Assessing Officer did not record prima facie satisfaction that the claim of the assessee was inadmissible, as required by Rule 8D. The ITAT's conclusions were justified, and no substantial question of law arose. Appeal dismissed.