Case Law Details
Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court)
So far as the claim of the assessee under Section 14A of the Act is concerned, sub-Section (2) and (3) of Section 14A of the Act read with Rule 8D of the Rules prescribe a formula for determination of expenditure incurred in relation to income, which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. The sine qua non for invocation of power under Section 14A of the Act read with Rule 8D of the Rules is the recording of satisfaction by the Assessing Authority that having regard to the accounts of the assessee it is not possible to arrive at the satisfaction with regard to the correctness of the claim of the assessee. In the instant case, the Assessing Officer has not recorded any satisfaction with regard to genuineness of the claim of the assessee before invoking the powers under Section 14A of the Act read with Rule 8D of the rules. Thus, disallowance was invalid.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
I.T.A.No.404/2016 has been filed by the assessee, whereas, I.T.A.No.468/2016 has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) being aggrieved by the order dated 22.04.2016 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘the tribunal’ for short). The subject matter of the appeals pertain to the Assessment year 2009-10. Since, both the appeals arise out of the same order, they are heard anal*g*usly and are be1 ng dec1ded by th1s c*mm*n judgment.
2. I.T.A.No.404/2016 was adm1tted by a bench of th1s Court v1de order dated 13.06.2017 *n the follow1ng substant1al quest1ons of law:
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