No disallowance U/s. 14A if Satisfaction as to incurring of expense against exempt income not recorded

JCIT Vs M/s IMC Ltd (ITAT Kolkata)

In this case AO had directly made the disallowance under section 14A by abruptly rejecting workings of assessee without having any cogent reason to deny the claim made by the assessee no expenditure was incurred for earning exempt income, the disallowance was deleted.

FULL TEXT OF THE ITAT JUDGMENT

1. These cross appeals by the assessee as well as revenue arise out of the common order passed by the Learned Commissioner of Income Tax (Appeals) –9, Kolkata (in short the ld CITA) in Appeal No. 733/CIT(A)-9/Range-11/2014-15/Kol dated 29.02.2016 against the order passed by the JCIT(OSD),Cir-11(1), Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 30.12.2010 for the Assessment Year 2008-09.

2. The first issue to be decided in these appeals is as to whether the Ld. CIT(A) was justified in upholding the disallowance u/s 14A of the Act read with Rule 8D(2)(iii) of the Rules after granting partial relief to the assessee, in the facts and circumstances of the case.

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