https://www.taxtmi.com/caselaws?id=792847 Section 14A disallowance under Rule 8D applies only where the assessee has claimed expenditure with a nexus to exempt income, and the Assessing Officer first records dissatisfaction under section 14A(2). The text explains that exempt dividend income and long-term capital gains were earned, but no related expenditure was claimed as a deduction; business income was taxed under section 44AD and other expenditure was capitalised to work-in-progress rather than debited to revenue. On those facts, a mechanical invocation of Rule 8D without identifying specific claimed expenditure or recording the requisite dissatisfaction is not sustainable, and the disallowance should be deleted. en-us Tue, 02 Jun 2026 00:00:00 +0530 Thu, 04 Jun 2026 08:37:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=792847 Section 14A disallowance under Rule 8D applies only where the assessee has claimed expenditure with a nexus to exempt income, and the Assessing Officer first records dissatisfaction under section 14A(2). The text explains that exempt dividend income and long-term capital gains were earned, but no related expenditure was claimed as a deduction; business income was taxed under section 44AD and other expenditure was capitalised to work-in-progress rather than debited to revenue. On those facts, a mechanical invocation of Rule 8D without identifying specific claimed expenditure or recording the requisite dissatisfaction is not sustainable, and the disallowance should be deleted. Case-Laws Income Tax Tue, 02 Jun 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=792847