Case Law Details
M/s IMC Ltd. Vs. ACIT (ITAT Kolkata)
Ld. AO had merely made the dis allowance u/s 14A by placing reliance on the tax audit report without even going into the very basis of the workings of the said amount arrived at by the tax auditor. During the year under appeal, it is not in dispute that the provisions of Rule 8D are applicable. Then it is the duty of the Ld. AO to record satisfaction in terms of section 14A(2) read with Rule 8D(1) of the Rules, before proceeding to make dis allowance as per Rule 8D(2) of the Rules. In the instant case, we find that the assessee has claimed that no expenditure has been incurred for the purpose of earning exempt income which is quite evident from the fact that no dis allowance u/s 14A of the Act has been made by the assessee in the return of income. Once it is done by the assessee, it is the duty of the Ld. AO first to disturb such belief of the assessee by recording proper satisfaction having regard to the accounts of the assessee in terms of section 14A (2) of the Act read with Rule 8D(1) of the Rules. We find no such satisfaction has been recorded by the Ld. AO in the instant case.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
1. This appeal by the Assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-XII, Kolkata [in short the ld CIT(A)] in Appeal No.181/XII/R-11/12-13 dated 25.09.2014 against the order passed by the ACIT,Range-11, Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 29.01.2013 for the Assessment Year 2010-11.
2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the dis allowance made u/s 14A of the Act read with Rule 8D(2) of the Rules.
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