2014 (7) TMI 1286

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..... ay Garg, Judicial Member: The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] dated 13.12.11 relevant to assessment year 2008-09. 2. The sole ground raised in the appeal is with regard to the confirmation of addition of Rs. 10,49,901/- made by the ld. CIT(A) u/s 14A of the Income Tax Act read with r .....

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..... re worked out the said expenditure by applying rule under 8D.(iii) of the I.T. rules at Rs. 1049901/- and disallowed the same. 4. In appeal before the CIT(A), it was submitted by the representative of the assessee that the AO had not given any reasoning for rejecting the assessee's suomoto working of disallowance u/s14A at Rs. 4,99,614/-. However, the CIT(A) observed that since the assessment yea .....

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..... nt of expenditure in relation to exempt income, if, the AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure. The satisfaction of the Assessing Officer has to be arrived at, having regard to the accounts of the assessee. Sub section (2) does not ipso facto enable the Assessing Officer to apply the method prescribed by the rules straightaway with .....

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..... essment 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 . He without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of .....

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..... the assessee, then he will assess the income accordingly. However, if the AO does not agree with the computation made by the assessee and in that event, he will have to record his dissatisfaction with reasoning for the same by way of a speaking order, then he will be at liberty to resort to the provisions of Rule 8D. Needless to say, the assessee will co-operate and promptly supply the necessary .....

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