2018 (8) TMI 1151 - HC - Income Tax

Disallowance u/s 14A - ITAT deleted the diallowance by holding that, in this case for both years, the assessee had offered amounts as disallowance claiming them to be expenditure for tax exempt income. The Assessing Officer merely proceeded to reject such amount as expenditure and straightaway applied Rule 8D without adducing any reasons. ITAT did not fall into error in holding as it did; no substantial question of law arises. - Decided against the revenue.

Summary

The Delhi High Court dismissed two appeals related to disallowance under Section 14A for tax exempt income. The court upheld the decision based on CIT-VI v. Taikisha Engineering India Ltd., stating that the Assessing Officer must provide reasoning before rejecting the assessee's explanation for expenditure. The ITAT's decision was upheld, and no substantial question of law arose.