2015 (10) TMI 752

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....beit, confined to question as to whether the ITAT erred in affirming the order of the Commissioner of Income Tax (Appeals) [CIT(A)] in deleting the disallowance on account of invoking Rule 8D read with Section 14A of the Income Tax Act, 1961? 3. Learned counsel for the Assessee has placed on record a copy of the order passed by the Assessing Officer ('AO') by pointing out that the copy at Annexure-I is not the correct copy. 4. The Assessee is a company engaged in the business of providing legal support and other support services to law firms. These services are specifically related to search of trade mark, patent and design out of the unique data base created and owned by the Assessee. The Assessee filed its return of income on 22....

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....found by the CIT(A) that contrary to the decision of this Court in Maxopp Investment (P) Ltd. v. CIT (2012) 347 ITR 272 (Del), the AO had failed to record the AO's satisfaction after examining the accounts which was requirement for invoking Section 14A of the Act. 7. In the impugned order dated 8th August, 2013, while dismissing the Revenue's appeal, the ITAT has additionally noted that the, CIT (A) has followed the order of the ITAT for AY 2007-08. 8. Having heard the learned counsel for the parties, the Court finds that the AO has indeed proceeded on the erroneous premise that the invocation of Section 14A is automatic and comes into operation as soon as the dividend income is claimed exempt. In Maxopp Investment (P) Ltd. (supra....

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....not form part of the total income under the said Act. In other words, sub-section (2) deals with cases where the assessee specifies a positive amount of expenditure in relation to income which does not form part of the total income under the said Act and sub-section (3) applies to cases where the assessee asserts that not expenditure had been incurred in relation to exempt income. In both cases, the Assessing Officer, if satisfied with the correctness of the claim of the assessee in respect of such expenditure or no expenditure, as the case may be, cannot embark upon a determination of the amount of expenditure in accordance with any prescribed method, as mentioned in sub-section (2) of section 14A of the said Act. It is only if the Assessi....