TaxTMI 
TaxTMI 
2017 (9) TMI 831
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....ar 2011-12 on the grounds inter alia that :- "On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs.6,41,37,885/- made u/s 14A of the I.T. Act read with Rule 8D of the I.T. Rules." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer noticed that the assessee has received exempt dividend income to the tune of Rs. 1,88,25,804/- during the year under assessment. AO, by invoking the provisions contained under section 14A of the Income-tax Act, 1961 (for short 'the Act') read with Rule 8D of Income-tax Rules, 1962 (for short 'the Rules'), proceeded to work out the disallowance as under :- Clause Particulars C....
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.... passed by ld. CIT. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Ld. DR for the Revenue challenging the impugned order contended inter alia that the AO has worked out the disallowance under Rule 8D as per accounts rendered by the assessee having been duly explained at the second last page of the assessment order; that section 114 of the Evidence Act, 1872 raises presumption in favour of the Revenue that there was nonsatisfaction of the AO and relied upon the decisions rendered by Hon'ble Apex Court in Mak Data Pvt. Ltd. vs. CIT - 2013-TIOL- 58-SC-IT a....
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....a for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Whether such determination is to be made on application of the formula prescribed under Rule 8D or in the best judgment of the Assessing Officer, what the law postulates is the requirement of a satisfaction in the Assessing Officer that having regard to the accounts of the assessee, as placed before him, it is not possible to generate the requisite satisfaction with regard to the correctness of the claim of the assessee. It is only thereafter that the provisions of Section 14A(2) and (3) read with Rule 8D of the Rules or a best....
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....es of law as there is not an iota of reasons of dis-satisfaction recorded by AO as to work out of disallowance of Rs. 1,63,779/- voluntarily made by the assessee itself because sub-section (2) & (3) of section 14A with Rule 8D of the Rules has only prescribed a formula for determination of an expenditure to earn the income which does not form part of the total income under the Act, which can only be invoked if the AO is not satisfied with the claim of the assessee. 11. Moreover, the assessee has come up with specific argument that it has not incurred any interest cost for earning exempt income but this plea of the assessee has also been brushed aside by the AO without recording any reason of dis-satisfaction. Moreover, when the assessee ....