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TMI Blog2017 (11) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... on the question of not recording of satisfaction by the AO inasmuch as nothing has been brought to our notice by the ld. DR to demonstrate that the Department has preferred any appeal on this score before the tribunal. The picture which, therefore, emerges is that the Assessing Officer did not record any satisfaction as stipulated in subsection (2) of section 14A and as the sequitur, the disallowance u/s 14A could not have been made - Decided in favour of assessee Deferred revenue expenditure addition - deduction written off during the year - CIT-A following the view taken in earlier years in the assessee’s own case held that the assessee should have claimed deduction at 1/10th of the expenditure for the present year and the next two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, the assessee furnished a reply, which has not been discussed in the assessment order. The Assessing Officer found the assessee s reply devoid of any merits in view of sub-section (2) and sub-section (3) of section 14A. He, thereafter, computed disallowance u/s 14A read with Rule 8D at ₹ 34,76,439/-. The ld. CIT(A) dealt with this issue in para 4.1.2. of his order. He characterized the assessment order cryptic inasmuch as the Assessing Officer did not bother to give any satisfaction. Considering the mandate of the Hon'ble jurisdictional High Court in the case of Maxopp Investments Ltd. vs. CIT (2012) 347 ITR 272 (Del) and that of the Hon'ble Bombay High Court in Godrej Boyce Manufacturing Company Ltd. (2010) 328 ITR 81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form part of the total income under the Act. No such satisfaction has been recorded by the Assessing Officer. In the light of this categorical finding, the Hon'ble High Court deleted the disallowance made u/s 14A. Similar view has been taken in Maxopp Investments Ltd. (supra) , in which it has been held that: the requirement of the Assessing Officer embarking upon a determination of the amount of expenditure incurred in relation to exempt income would be triggered only if the Assessing Officer returns a finding that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. Therefore, the condition precedent for the Assessing Officer entering upon a determination of the amount of the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) ought to have deleted the entire addition instead of restricting it to a lower level. The Revenue appears to have accepted the ld. CIT(A) s order on the question of not recording of satisfaction by the AO inasmuch as nothing has been brought to our notice by the ld. DR to demonstrate that the Department has preferred any appeal on this score before the tribunal. The picture which, therefore, emerges is that the Assessing Officer did not record any satisfaction as stipulated in subsection (2) of section 14A and as the sequitur, the disallowance u/s 14A could not have been made. We, therefore, delete the sustenance of addition to the tune of ₹ 3,25,201/-. 7. The only other ground in this appeal is against allowing deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only issue raised in this appeal is against the confirmation of disallowance u/s 14A read with Rule 8D at 0.5%. 11. Both the sides are in agreement that the facts and circumstances of making disallowance u/s 14A and sustaining it partly in the first appeal are mutatis mutandis similar to those of the preceding year. Similar to the preceding year, the Assessing Officer computed disallowance u/s 14A in the same manner without recording any satisfaction. The ld. CIT(A) again noticed that the Assessing Officer did not record any satisfaction and, as such, his view was not sustainable. He, however, confirmed disallowance for this year again at 0.5%. In the absence of there being any difference in the factual or legal position for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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