Rule 8D Disallowance Struck Down Because AO Acted Without Recorded Satisfaction

New Great Eastern Spinning And Weaving Company Limited Vs DCIT (ITAT Mumbai) 14A Isn’t a Guessing Game — Mechanical Rule 8D Invocation Axed Despite Large Investment Portfolio Mumbai ITAT allowed the appeal of The New Great Eastern Spinning & Weaving Co. Ltd. for AY 2018-19 and deleted a massive disallowance of ₹1.18 crore made u/s 14A r/w Rule 8D over and above the assessee’s suo motu disallowance of ₹17.79 lakh. The Tribunal held that section 14A is governed by the principle of proximate cause, not presumptions. Where the assessee had identified & disallowed direct investmen...