https://www.taxtmi.com/caselaws?id=797775 Section 14A(2) requires the Assessing Officer to examine the accounts and record cogent, objective dissatisfaction with the assessee's expenditure claim before invoking Rule 8D. Rule 8D is not an automatic computation merely because exempt income exists. A reasoned suo motu disallowance based on proportionate employee and communication costs cannot be increased through general references to common accounts, intermingled funds, transactions or interest expenditure without identifying defects or expenditure with a proximate nexus to exempt income. Unrebutted explanations on interest and interest-free own funds must be addressed. The additional disallowance was deleted, while the voluntary disallowance remained intact. en-us Wed, 19 Aug 2026 00:00:00 +0530 Thu, 27 Aug 2026 08:28:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=797775 Section 14A(2) requires the Assessing Officer to examine the accounts and record cogent, objective dissatisfaction with the assessee's expenditure claim before invoking Rule 8D. Rule 8D is not an automatic computation merely because exempt income exists. A reasoned suo motu disallowance based on proportionate employee and communication costs cannot be increased through general references to common accounts, intermingled funds, transactions or interest expenditure without identifying defects or expenditure with a proximate nexus to exempt income. Unrebutted explanations on interest and interest-free own funds must be addressed. The additional disallowance was deleted, while the voluntary disallowance remained intact. Case-Laws Income Tax Wed, 19 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=797775