RAKESH KUMAR JAIN,DEHRADUN vs. DCIT, DEHRADUN

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ITA 2299/DEL/2017Status: DisposedITAT Dehradun10 November 2021AY 2012-132 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO failed to record the necessary satisfaction as required by Section 14A(2) before making the disallowance. Therefore, the disallowance was not legally valid.

What were the facts?

The assessee claimed dividend income as exempt. The Assessing Officer (AO) made a disallowance under Section 14A based on a percentage of average investment value. The CIT(A) confirmed this disallowance.

What were the issues?

Whether the disallowance under Section 14A was valid when the Assessing Officer did not record the required satisfaction.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN BENCH, NEW DELHI

Before: SHRI AMIT SHUKLA & Dr. B.R.R. KUMAR

Hearing: 08.11.2021

Both appeals have been filed by the assessee against the order of the ld. CIT(A)-Haldwani, dated 24.01.2017 & 23.03.2017 respectively. 2. Following grounds have been raised by the assessee:

“1. That the learned CIT(A) erred in law and on facts in confirming the addition of Rs. 79,953/- as per section 14A.”

ITA No. 2300/Del/2017, A.Y. 2013-14

“1. That the learned CIT(A) erred in law and on facts in confirming the addition of Rs. 90,702/- as per Section 14A.”

3.

The only issue involved in this case is disallowance u/s 14A.The assessee has shown the dividend income of Rs. 34,60,250/- and claimed the same as exempt under the provisions of the Income Tax Act. The Assessing Officer has disallowed one half percentage of average value of the investments on going to the record, we find that while resorting to the disallowance u/s 14A. We find that the Assessing Officer has not invoked the necessary satisfaction in accordance with the provisions of section 14A (2). Hence, the disallowance made by the AO and as confirmed by the Ld. CIT(A) cannot be held to be legally valid.

4.

Appeal of the assessee is allowed.

Order pronounced in open court on this 10th day of November, 2021.

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