SC Dismisses Revenue Appeal as AO Failed to Record Dissatisfaction Before Applying Rule 8D

PCIT-3 Vs DLF Home Developers Ltd (Supreme Court of India) The matter relates to Assessment Year (AY) 2011–12 and concerns the disallowance of expenditure under Section 14A of the Income-tax Act, 1961 read with Rule 8D of the Income-tax Rules, 1962. The Assessing Officer (AO) examined the balance sheets for the financial years ending on 31.03.2010 and 31.03.2011 and observed that the assessee’s investment in equity shares had declined during the relevant period. At the beginning of FY 2010–11, the investments were recorded at Rs. 2,73,331.69 lakhs, which reduced to Rs. 1,78,239.36 lakhs ...