Appeal allowed for AY 2011-2012, disallowances under sec 14A & 115JB deleted. Assessing Officer's satisfaction required.

The appeal was allowed by the Tribunal for the assessment year 2011-2012. The disallowance under section 14A read with Rule 8D and the addition of disallowance for the computation of Book Profits under section 115JB were both deleted in favor of the assessee. The Tribunal emphasized the necessity for the Assessing Officer to record satisfaction before applying disallowances, which was not done in this case. The decision was based on precedents from the assessee's previous cases for other assessment years.

---

---

Issues:
1. Disallowance under section 14A read with Rule 8D of the Income Tax Rules.
2. Addition of disallowance under section 14A for computation of Book Profits under section 115JB of the Act.

Analysis:

*Issue 1: Disallowance under section 14A read with Rule 8D of the Income Tax Rules*

The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2011-12. The Assessing Officer (AO) had disallowed an amount under section 14A read with rule 8D, which was partly reduced by the CIT (A). The AO calculated the disallowance despite the assessee's claim that no expenditure was incurred towards earning exempt income. The CIT (A) observed that the AO did not provide reasons for the disallowance made and that the assessee had already made a suo moto disallowance. The Tribunal referred to a previous decision in the assessee's own case for AY 2008-09 and 2009-10 where a similar disallowance was deleted. The Tribunal held that the AO must record satisfaction before applying the disallowance and since no such satisfaction was recorded, the disallowance was deleted.

*Issue 2: Addition of disallowance under section 14A for computation of Book Profits under section 115JB of the Act*

The second ground of appeal related to the addition of disallowance under section 14A for the computation of Book Profits under section 115JB of the Act. The Tribunal noted that a similar issue had been decided in favor of the assessee in previous years. Referring to a Special Bench decision, the Tribunal held that no disallowance under section 14A read with rule 8D could be made while computing book profits under section 115JB. As the facts of the present case were identical to previous cases, the Tribunal allowed this ground of appeal.

In conclusion, the Tribunal allowed the appeal filed by the assessee for the assessment year 2011-2012 based on the decisions in the assessee's own cases for previous assessment years. The disallowance under section 14A read with Rule 8D and the addition of disallowance for the computation of Book Profits under section 115JB were both deleted in favor of the assessee.

The order was pronounced in the open court on 15th February 2019.

---