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2018 (5) TMI 493 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Held that:- It is the mandatory requirement u/s 14A of the Act, 1961 and Rule 8D of the Income Tax Rules, 1962 to record satisfaction, and if the satisfaction/reasons are not mentioned the question of applying Rule 8D did not arise. On the aspect of administrative expenses being disallowed since there was a failure by the Assessing Officer to comply with the mandatory requirement of Section 14A(2) read with Rule 8D (1) (A) of the Rules record of satisfaction is required there under. The question of re-applying Rule 8D(2) (iii) of the Rules did not arise. In the present case also, the same does not arise. AO as well as the CIT(A) have failed to take into account the expenses incurred by the assessee and there was no satisfaction recorded by the Assessing Officer regarding invocation of Rule 8D. This legal aspect was overlooked by the Assessing Officer as well as by the CIT(A). Therefore, the order of the CIT(A) does not survive. - Decided in favour of assessee.
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