Case Law Details
Smartchem Technologies Ltd. Vs. ACIT (ITAT Mumbai)
There is no reference to any of the fact-situation or any credible reasoning or material by the assessing officer before rejecting the plea of the assessee and proceeding to determine the dis allowance by applying the formula contained in rule 8D of the Rules. In fact, the phraseology of section 14A of the Act itself specifies that the satisfaction contemplated is required to be arrived at “having regard to the accounts”, an approach which is conspicuous by its absence in the present case. Therefore, in view of such an inadequacy in the action of the assessing officer, it has to be held that the satisfaction contemplated under section 14A(2) of the Act has not been recorded by the assessing officer and thus, he has failed to comply with the condition precedent before embarking on applying the formula contained in rule 8D of the Rules in order to compute the dis allowance under section 14A of the Act. Thus, in our considered opinion, on this aspect itself, the determination of dis allowance made by the assessing officer at Rs. 9,95,080 is untenable.
Full Text of the ITAT Order is as follows:-
The captioned are six appeals relating to the same assessee for different assessment years involving a common issue, therefore, they have been clubbed and heard together, and a consolidated order is being passed for the sake of convenience and brevity.
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