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TMI Blog2014 (9) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the assessee that major part of the investment was in unquoted shares of the group companies, the capital gains income from which was not exempt and even no dividend income was received from such investments. Thus as the assessee has earned dividend income, it might have incurred some expenses for the said purpose, in our view, the interest of justice will be well served if the disallowance u/s 14A is restricted to 10% of the remaining/common administrative expenses of ₹ 16,60,983/-. - Decided partly in favour of assessee - ITA No.2963/M/2013 - - - Dated:- 17-9-2014 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by : Shri Kirit J Sheth, A.R. Revenue by : Shri B. Yadagiri, D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gains income from which was not exempt. Even no dividend income was received from the investments made in unquoted shares. However the ld. CIT(A) observed that since the assessee had earned dividend income, so assessee might have incurred some expenses in respect of the same. He therefore upheld the disallowance made by the AO as per the provisions of rule 8D of the I.T. Rules. Aggrieved from the order of the ld. CIT(A), the assessee has preferred the present appeal before us. 4. The ld. A.R. of the assessee, before us, has submitted that the assessee during the relevant assessment year has earned interest income of ₹ 1,80,49,474/-. However, the interest expenditure claimed in the profit and loss account was ₹ 12,406/- only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e furnish an objective basis for the AO to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recourse to the method prescribed by the rules. An objective satisfaction contemplates a notice to the assessee, an opportunity to the assessee to place on record all the relevant facts including his accounts and recording of reasons by the AO in the event that he comes to the conclusion that he is not satisfied with the claim of the assessee. 6. However, a perusal of the assessment order reveals that the AO has not followed the guidelines of objective satisfaction as laid down by the Hon ble Bombay high Court in the case of Godrej Boyce (supra) while making the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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