TaxTMI 
TaxTMI 
2023 (9) TMI 1713
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....ereinafter referred as 'the Act') by the ACIT, Circle-6(1), New Delhi (hereinafter referred as the Ld. AO). 2. The assessee company filed return declaring loss which was selected for scrutiny and Ld. AO has made a disallowance u/s 14A r.w.r 8D observing that the assessee has made a disallowance and its computation under clause (iii) of the rule 8D which is for expenses other than direct expenses and interest. AO concluded that the assessee had claimed deduction of Rs. 48,48,136 out of total disallowance of Rs. 66,87,900/- calculated as per clause (iii) Rule 8D without any legal basis. 2.1 Ld. CIT(A) has sustained the addition and the relevant findings in para 7.1 to 7.4 are reproduced below :- "7.1 Briefly, the facts of the c....
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....ect expenses. Thus it may be seen that the Assessing Officer expressed his dissatisfaction on the quantum of disallowance shown by the Assessee. The Appellant's main contention that the Assessing Officer did not record his satisfaction regarding the quantum of disallowance made by it. The observations of the Assessing Officer in very express words pointed out the above to rebut the contention of the Appellant. 7.3 Before the Assessing Officer, the Appellant has submitted that it is a promoter group company of Dabur India Limited and there was no investment activity in holding the shares of this company. After considering the submission of the Assessee during assessment proceedings, the Assessing Officer held that the decision of th....
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....ssessing Officer was fully justified in computing the disallowance under Rule 8D of the IT Rules, 1962 and enhancing the disallowance to the extent of Rs.48,48,136/-. Accordingly, the grounds of appeal taken by the Appellant are dismissed." 3. The assessee is in appeal raising following grounds :- "1. On facts and circumstances of the case and in law, no satisfaction was recorded by the Ld AO before invoking notional rule of disallowance u/s 14A read with rule 8D. Thus, enhanced addition of Rs 48,48,136 is unstainable under law and deserves to the quashed. 2. On the facts and circumstances of the case and in law, both the learned CIT-A and Ld AO has erred in determining the enhanced disallowances u/s 14A of Rs 48,....
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....losing investment is 965954139 Opening investments 1431445847 Average investments 1198699993 Less: Expenses on account of income on which no activity has been done in the previous year Total exempt income Dividend received 358979674 Long term capital gain & intt. Tax free bonds 72093173 431072847 Less: Dividend Recd. From DIL 348694400 % of DIL dividend in exempted income 81% 4848136 Disallowance u/s 14A 1145364 7. It is now settled proposition of law in regard to application of provisions of section 14A read with Rule 8D of Income-tax what the law postulates is the requirement of a satisfaction in the Assessing Officer that having regard to the accounts of the assessee, as ....