https://www.taxtmi.com/caselaws?id=274655 A disallowance under Section 14A cannot be increased by mechanical application of Rule 8D unless the Assessing Officer's rejection of the assessee's own computation is reasonable on the facts. Here, exempt income arose incidentally from surplus funds during plant set-up, while borrowed funds were used for establishing the industrial project. On that factual basis, the larger disallowance was not sustainable and the rejection of the assessee's offered disallowance did not justify automatic recourse to Rule 8D. The note also states that no substantial question of law arose. en-us Tue, 19 Dec 2017 00:00:00 +0530 Mon, 27 Aug 2018 17:34:40 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=274655 A disallowance under Section 14A cannot be increased by mechanical application of Rule 8D unless the Assessing Officer's rejection of the assessee's own computation is reasonable on the facts. Here, exempt income arose incidentally from surplus funds during plant set-up, while borrowed funds were used for establishing the industrial project. On that factual basis, the larger disallowance was not sustainable and the rejection of the assessee's offered disallowance did not justify automatic recourse to Rule 8D. The note also states that no substantial question of law arose. Case-Laws Income Tax Tue, 19 Dec 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=274655