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2023 (7) TMI 672 - ITAT DELHIDisallowance u/s 14A r.w.r. 8D - claim of the assessee that it has incurred NIL expenses for earning exempt income - necessity of recording satisfaction by AO - HELD THAT:- A perusal of the assessment order shows that nowhere the AO has recorded any satisfaction nor there is any finding in respect of correctness of the claim of the assessee that it has incurred NIL expenses for earning exempt income. As decided in Maxopp Investment Vs. CIT [2018 (3) TMI 805 - SUPREME COURT] applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance u/s 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting the said apportionment. In that eventuality, it will have to record its satisfaction to this effect. Further, while recording such a satisfaction, nature of loan taken by the purchasing the shares/making the investment in shares is to be examined by the AO - We direct AO to delete the addition - Decided in favour of assessee.
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