https://www.taxtmi.com/caselaws?id=461565 ITAT Mumbai held that AO cannot directly apply Rule 8D for disallowance under Section 14A without first examining the assessee's books of accounts. The AO must objectively verify and record satisfaction that the assessee's suo moto disallowance claim regarding expenditure for earning exempt income is incorrect before invoking Rule 8D. Since the AO failed to follow this mandatory procedure and directly resorted to Rule 8D computation, the addition was quashed and the assessee's appeal succeeded. en-us Wed, 26 Jun 2024 00:00:00 +0530 Sat, 12 Apr 2025 11:55:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=461565 ITAT Mumbai held that AO cannot directly apply Rule 8D for disallowance under Section 14A without first examining the assessee's books of accounts. The AO must objectively verify and record satisfaction that the assessee's suo moto disallowance claim regarding expenditure for earning exempt income is incorrect before invoking Rule 8D. Since the AO failed to follow this mandatory procedure and directly resorted to Rule 8D computation, the addition was quashed and the assessee's appeal succeeded. Case-Laws Income Tax Wed, 26 Jun 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=461565