Appeal Dismissed: No Substantial Legal Question; ITAT's Decision on Section 14A Disallowance Upheld; Book Profits Unaddressed.

The HC dismissed the appeal, ruling that no substantial question of law arose. The court upheld the ITAT's decision regarding disallowance under Section 14A, as the AO did not provide adequate reasons or demonstrate dissatisfaction with the assessee's expenditure claims. The issue concerning Circular No. 5 of 2014 was not addressed due to lack of submissions before the ITAT. Additionally, the court found no discussion on the computation of book profits under Section 115JB, and the revenue's failure to raise this issue with the ITAT precluded it from being considered.

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Issues Involved:
1. Disallowance under Section 14A of the Income Tax Act.
2. Applicability of Circular No. 5 of 2014 issued by the Central Board of Direct Taxes.
3. Computation of book profits under Section 115JB of the Income Tax Act.

Summary:

1. Disallowance under Section 14A of the Income Tax Act:
The assessee filed the original return for A.Y. 2009-2010, declaring income and claiming deductions under Section 80-IA. A search under Section 132 led to a reassessment, resulting in disallowances, including Rs. 59,34,74,860/- under Section 14A read with Rule 8D. The CIT(A) partly allowed the assessee's appeal, but the ITAT dismissed the revenue's appeal. The High Court examined whether the Assessing Officer (AO) satisfied the mandatory requirement of recording dissatisfaction with the assessee's claim of expenditure. The AO's failure to provide cogent reasons or demonstrate dissatisfaction with the assessee's claim led the court to uphold the ITAT's decision, referencing cases like *Principal Commissioner of Income Tax Vs. Bajaj Finance Ltd.*, *Principal Commissioner of Income Tax-2 Vs. Bombay Stock Exchange Ltd.*, and *Principal Commissioner of Income Tax Vs. Godrej & Boyce Mfg. Co. Ltd.*

2. Applicability of Circular No. 5 of 2014:
The court did not address this issue as Mr. Suresh Kumar conceded that no submissions regarding Circular No. 5 of 2014 were made before the ITAT.

3. Computation of book profits under Section 115JB of the Income Tax Act:
The court found no discussion in the impugned order related to Section 115JB. The revenue's failure to raise the issue with the ITAT through a Miscellaneous Application meant it could not be considered a substantial question of law.

Conclusion:
The High Court dismissed the appeal, concluding that no substantial question of law arose from the case.

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