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2018 (11) TMI 645 - HC - Income TaxDisallowance u/s 14A r.w.r 8D - AO has not recorded his satisfaction regarding the correctness of the self disallowance made by the assessee - Held that:- Rule 8D is not mandatory and would come into play only when the Assessing Officer comes to the conclusion and records his satisfaction that he was not satisfied with the correctness of the disallowance made by the assessee, having regard to the accounts placed before him. This is a necessary and mandatory precondition for the Assessing Officer to invoke and apply Rule 8D of the Rules. Thus, Rule 8D cannot be applied unless this satisfaction is recorded by the AO. In the present case the AO has not recorded his satisfaction regarding the correctness of the self disallowance made by the assessee under Section 14A, as is mandatory in terms of sub section (2) of Section 14A to invoke and take recourse to Rule 8D of the Rules. Thus, the Assessing Officer, did not act as per and in terms of the statute. - Decided against revenue.
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