2018 (12) TMI 1392

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... iding whether or not the deduction or disallowance, if any, made by the assessee was satisfactory and proper Disallowance made by the Assessing Officer by simply invoking clause (ii) to Rule 8D without recording any satisfaction in terms of Section 14A would not be in accordance with and as per the terms of the statute. - decided in favour of assessee.
MR. SANJIV KHANNA AND MR. ANUP JAIRAM BHAMBHANI JJ. Appellant Through Mr. Ruchir Bhatia, Advocate. Respondent Through Nemo. O R D E R By order dated 1st August, 2018, the appellant-Revenue was directed to place on record copy of the profit and loss account and balance sheet within a period of four weeks. The appellant-Revenue was granted further time of six weeks vide order dated 14th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssee in view of following case laws"- (i) Dhanuka Sons vs. CIT 339 ITR 0319 Calcutta (2011), wherein the Hon'ble High Court held that disallowance of in expenditure in relating to exempt income u/s 10(34) is justified u/s 14A. (ii) CIT vs. Smt Leena Ramchandran 339 ITR 0296 (2011), wherein Hon'ble Kerala High Court held that expenditure in relation to income not forming part of total income is justifiably disallowed. (iii) Punjab State Cooperation Federation Ltd. vs. CIT 336 ITR 0495 (2011), in this case Hon'ble Punjab and Haryana High Court held that expense incurred by the assessee for earing income which does not form part of total income under the Act shall not be allowable expenditure. Disallowance required to be made u/s 14A read .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ection 14A of the Act. The Assessing Officer had erroneously assumed that Rule 8D applies to all cases of exempt income, without examining and deciding whether or not the deduction or disallowance, if any, made by the assessee was satisfactory and proper. This mandate in terms of Section 14A of the Act is no longer res intergra. Supreme Court in Godrej and Boyce Manufacturing Company Limited versus Deputy Commissioner of Income Tax, Mumbai and Another, (2017) 7 SCC 421 has held:- "37. We do not see how in the aforesaid fact situation a different view could have been taken for Assessment Year 2002-2003. Sub-sections (2) and (3) of Section 14-A of the Act read with Rule 8-D of the Rules merely prescribe a formula for determination of expendi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X