TaxTMI 
TaxTMI 
2019 (5) TMI 1714
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....13 declaring a total income of Rs. 1,57,48,506/-. The Assessing Officer completed assessment u/s 143(3) of the Act on 31.03.2016 determining total income at Rs. 1,79,91,190/-, inter alia, making a disallowance u/s 14A of the Act of Rs. 5,64,869/- and further adding an amount of Rs. 16,77,816/- as interest on undisclosed income derived from Allahabad Bank and Standard Chartered Bank. 3. Aggrieved the assessee carried the matter in appeal without success. Both the Assessing Officer as well as ld. CIT(A) noted that the assessee chose not to respond either before the Assessing Officer or before the ld. CIT(A). Aggrieved the assessee is in appeal before us on the following grounds: 1. That the ld. Commissioner(Appeals) has erred in upholding ....
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....5,64,869/- u/s 14A. The A.O in the order has categorically observed that explanation was called for from the appellant for having not disallowed any sum for the exempt income so earned, the appellant did not reply and hence the A.O has duly recorded its satisfaction for invocation of sec.14A r.w.r 8D(2)(iii) and disallowed the sum of Rs. 5,64,869/- (Rs. 5,89,869/- - Rs. 25,000/-). The Hon'ble Supreme Court in Maxopp Ltd. 402 ITR 401 (SC) has held that satisfaction needs to be recorded by the A.O and as observed earlier in this paragraph, the A.O had duly recorded his satisfaction and hence the A.O's action cannot be held as unjustified. As regards quantum of the disallowance, the A.O has rightly followed Rules prescribed in the IT Rules, 19....
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...., is his satisfaction that the suo moto disallowance made by the assessee is, in his opinion, not correct or justified on the particular set of facts. It is not the case of the assessee that section 14A is not applicable to his case as alleged by the Assessing Officer. Thus no proper satisfaction as required in law was recorded by the Assessing Officer prior to invoking Rule 8D of the I.T. Rules. Hence we delete the disallowance u/s 14A and allow this appeal of the assessee. 9. Ground No.2 is against the addition made by the A.O on the ground that the assessee earned undisclosed interest. The assessee's contention is that the amounts, in question, was held by him as a trustee, in an escrow account, consequent to the orders passed by the Ho....