2020 (9) TMI 675

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....r the Appellant : Ms.S.Premalatha For the Respondent : Mr.G.Baskar JUDGMENT [ Order of the Court was made by T. S. SIVAGNANAM , J. ] This appeal, filed by the Revenue, under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) is directed against the order dated 05.07.2019 passed by the Income Tax Appellate Tribunal ('the Tribunal' for brevity), Bench 'B....

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....f Income Tax, Corporate Circle - III(1), Chennai Vs. M/s.Tidal Park Limited (T.C.A.No.732 and 733 of 2018 dated 07.07.2020) and answered against the Revenue and it is relevant to extract the following from the said decision: 6. Further, the Bombay High Court in the case of Godrej & Boyce Manufacturing Company Limited, Mumbai Vs. Deputy Commissioner of Income Tax, reported in (2010) 328 ITR 0081....

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....ded; (e) once a proximate cause for disallowance is established-which is the relationship of the expenditure with income which does not form part of the total income- a disallowance has to be effected. All expenditure incurred in relation to income which does not form part of the total income under the provisions of the Act has to be disallowed under s. 14A. Income which does not formpart of the t....

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....ssee claims to have incurred in relation to income which does not form part of the total income. Moreover, the satisfaction of the AO has to be arrived at, having regard to the accounts of the assessee. Hence, sub-s. (2) does not ipso facto enable the AO to apply the method prescribed by the rules straightaway without considering whether the claim made by the assessee in respect of the expenditure....