2025 (2) TMI 1544

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....(A) erred in confirming the disallowance u/s. 14A of the Act r.w.r. 8D of the IT Rules, 1962 though restricting it to Rs. 162215/-. ii. The AO and the Id. CIT (A) erred in relying on CBDT Notification No. 43 / 2016 dt. 02.06.2016 without appreciating that the said Notification cannot be applied simpliciter and that the AO has to be first satisfied that the appellant has incurred expenses some of which relates to exempt income & the same has been claimed as deduction in the return of income filed which is not the facts of the instant case. iii. The Id. CIT (A), in doing so, erred in not following the binding decision of the Hon. ITAT in the appellant's own case allowing his appeal for A.Y. 2016-17 having exactly the ide....

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....and interrelated and pertains to Challenging the order of ld CIT (A) in restricting the disallowance, therefore, we have decided to take up all these grounds together and dispose of the same through the present consolidated order. 6. The Ld.AR appearing on behalf of the assessee, reiterated the same arguments as raised by him before the lower authority's and also submitted that the lower authority has erred in relying upon CBDT notification no. 3 of 2016 dated 02/06/2016, without appreciating, as the said notification cannot be applied simpliciter, and that the Ld.AO has to be first satisfied that the appellant has incurred expenses some of which relates to exempt income and the same has been claimed as deduction in the return of income.....

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....s himself apportioned but the AO was not accepting the said apportionment. In that eventuality, it will have to record its satisfaction to this effect. Further, while recording such a satisfaction, nature of loan taken by the assessee for purchasing the shares/making the investment in shares is to be examined by the AO." (Emphasis Supplied) 9. As held by the Hon'ble Supreme Court, the Assessing Office rought to have recorded satisfaction, having regard to the accounts of the Appellant, that the suo-motu disallowance offered by the Appellant was not correct. In the present case the Appellant had not claimed deduction for expenses incurred for earning exempt income which were debited to the Capital Account of the Appellant. Thus, in ....