9911796707
TMI Blog2016 (12) TMI 1791X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. 2. Brief facts of the case are that the assessee is a non banking finance company carrying on the business of loans and advances and share trading. It derives its income from other sources like mutual fund, derivatives transactions and speculation in shares besides dividend income. For the Assessment Year 2008-09, the assessee filed their return of income on 30-09-2008 declaring an income of Rs. 97,11,735/- and Book Profit under section 115 of the Act at Rs. 10,67,913/-. During this Assessment Year, the Assessee earned Rs. 48,04,057/- and Long Term Capital Gains of Rs. 3,24,19,990/-. Assessee offered Rs. 8,050/- being the amount of expense relatable to dividend and disallowed under section 14A of the Act. However, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd vs. DCIT (2012) ITA No. 47/Kol/2012. He also placed reliance on a decision reported in Maxopp Investment Ltd. & Ors Vs. CIT (2012) 247 CTR 0162 (Del), and the decision of the jurisdictional High court in CIT Vs. Ashish Jhunjhunwala, G.A. No. 2990 of 2013. On the other side, Argument of the learned DR is that the learned CIT(Appeals) dealt with this matter and vide paragraph no 7 he gave cogent reasons and this appeal is devoid of any merits. 6. We have gone through the record in the light of the law on the aspect. Observations in the order of the Assessing Officer for invoking provisions under section 14A of the Act read with Rule 8D of the Rules are as follows: "Reg: Disallowance u/s 14A of Rs. 11,84,981/- The assessee has ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome to be reasonable estimate for expenditure relatable to exempt income. Even by that yard stick the claim of having incurred expenditure of Rs. 8,050/- in relation to dividend income of Rs. 48,04,057/- and "Long Term Capital Gain" Rs. 3,24,18,990/- appears to be quite meagre. I am, therefore, satisfied that the claim of expenditure incurred and shown by the appellant with regard to the accounts is not correct". 8. Basing on this observation of the learned CIT(Appeals), learned DR argues that here is sufficient compliance of recording of satisfaction for invoking provisions under section 14A of the Act read with Rule 8D of the Rules. 9. On the aspect of recording of satisfaction, Section 14A(2) mandates that the Assessing Officer sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the accounts of the assessee of the previous year, failing which his assumption of jurisdiction under section 14A of the Act read with Rule 8D of the Rules becomes non est in the eye of law. 10. Our above understanding is fortified by a decision reported in Maxopp Investment Ltd. & ors. Vs. Commissioner of income tax (2012) 247 CTR 0162 (Del) for the principle that even prior to the introduction of sub-ss. (2) and (3), Section 14A would require the AO to first reject the claim of the assessee with regard to the extent of such expenditure, such rejection must be for disclosed cogent reasons and it is only then that the question of determination of such expenditure by the AO would arise. Further, in Commissioner Of Income Tax, Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come, which is conspicuous in this matter. We, therefore, have no hesitation to hold that it is the satisfaction of Assessing Officer and Assessing Officer alone that infuses life into the order of Assessment in respect of disallowance of deductions, and none other much less the learned CIT(Appeals) can substitute his opinion for that of the Assessing Officer to validate otherwise invalid order of Assessing Officer. With this view of the matter we hold that the order of the authorities cannot be sustained and the additions made on account of invocation of Section 14A of the Act read with Rule 8D of the Rules shall be deleted. We accordingly allow the appeal. 12. In the result, appeal of the assessee is allowed. Order is pronounced in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
