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TMI Blog2018 (1) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The AO shall also verify any other claim if so raised by the assessee, and thereafter pass afresh order of assessment. - Appeal of assessee allowed for statistical purposes. - I.T.A. No. 2144/Mum/2016 - - - Dated:- 12-1-2018 - SH. SHAMIM YAHYA, AM AND SH. SANDEEP GOSAIN, JM For the Appellant : Ms. Aarati Visanji For the Respondent : Sh. M. V. Rajguru ORDER Per Sandeep Gosain, Judicial Member: The present Appeal filed by the assesseeis against the order of Ld. Commissioner of Income Tax (Appeal) 3, Mumbai dated 29.01.16 for AY 2011-12 on the grounds mentioned herein below:- 1. In the facts and circumstances of the case and in law, the Learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t structural articles i.e. empennages and center wing box (finished products). The appellant filed its return of income on 30.09.2011 declaring loss of ₹ 2,11,01,649/, The total income of the appellant was calculated at Nil. The AO while passing the assessment order disallowed ₹ 39,84,218/- u/s 14A and pre-operative expenses of ₹ 1,70,26,814/, Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee. Now before us, the assessee has preferred the present appeal by raising the above grounds. Ground No. 1. 1.1 3. This ground raised by the assessee relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the AO had not recorded any satisfaction as to the correctness of the claim of the assessee having regard to the account of assessee. The Ld. AR also relied upon the following judgments judgments:- (a) CIT v. Hero Management Service Limited (2014) 360 hR 68 (Delhi High Court) (b) CIT v. Printers House Private Ltd. (2010) 188 Taxman 70 (Delhi High Court) (c) Swapna Murarka vs. ACIT [2015] 58 taxmann.com 369 (Mumbai - Tribunal) (d) CIT v. Walfort Share and Stock Brokers Private Limited (2009) 310 ITR 421 (Born) [Affirmed in 326 ITR I (SC)] (e) CIT v. Reliance Industries Ltd. 339 ITR 632 (Born) (f) CIT v. Metalman Auto P. Ltd. (2011) 336 ITR 434 (P H) (g) CIT v. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the explanation given by the assessee is not proper. The operative para is reproduced below. 15. A bare perusal of the above provisions indicates that the AO shall determine the amount disallowable as per Rule 8D, if he, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to exempt income. Even if the assessee claims that no expenditure was incurred in respect of exempt income, the AO is supposed to follow the mandate of Rule 8D if he is not satisfied with the correctness of the assessee's claim. To put it simply, the further disallowance u/s.14A is called for when the AO is not satisfied with the assessee's claim of having incurred no expenditure or some amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll operate. In the instant case, the authorities below have directly gone to the second stage of computing disallowance u/s. 144 as per Rule 8D without rendering any opinion on the correctness or otherwise of the assessee claim in this regard. We, therefore, set aside the impugned order on this issue and restore the matter to the file of AO to recompute disallowance, if any, in accordance with our above observations after duly examining the assessee s claim in this regard. 6. Considering the facts and circumstances of the case we find that the AO has not recorded its satisfaction by giving specific reasons as to the correctness of the claim of the assessee having regard to the accounts of the assessee. The Ld. CIT(A) while partly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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