In absence of formation of satisfaction, the AO cannot apply Rule 8D of the Rul…
In absence of formation of satisfaction, the AO cannot apply Rule 8D of the Rules.
In absence of formation of satisfaction, the AO cannot apply Rule 8D of the Rules.
PRINCIPAL COMMISSIONER OF INCOME TAX VS DLF HOME DEVELOPERS LTD.-(High Court)
Held
Supreme Court in Godrej & Boyce Manufacturing Company Ltd., has held that Rule 8D would apply where the AO first records his satisfaction that disallowance, if any, made by the assessee is not correct and is not in accordance with the mandate of s. 14A. In absence of formation of satisfaction, the AO cannot apply Rule 8D of the Rules. In the present case, the AO has treated Rule 8D as mandatory which would apply to all cases where exempt income is earned. An order passed by AO is, therefore, not in terms of the mandate of s. 14A(2). We do not find any substantial question of law arises from this issue.
(Paras 10&11)
List for hearing on 05.08.2020.
VIPIN SANGHI, J
SANJEEV NARULA, J
JANUARY 24, 2020
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In absence of formation of satisfaction, the AO cannot apply Rule 8D of the Rules.
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