Section 14A Disallowance Unsustainable if Incorrectness of Claim Unproven: ITAT Ahmedabad

ACIT Vs LA Renon Healthcare Pvt Ltd (ITAT Ahmedabad)

ITAT Ahmedabad held that the AO must record a proper satisfaction regarding the incorrectness of the assessee’s claim before invoking Rule 8D u/s. 14A. Thus, in absence of such satisfaction, disallowance u/s. 14A of the Income Tax Act unsustainable.

Facts-

The case of the assessee was selected for scrutiny under CASS. AO observed that the company has claimed professional fees to the doctors amounting to Rs.5,43,98,834/-. AO also observed that the assessee-company has earned a dividend of Rs.1,64,8

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