Disallowance U/s. 14A Read with Rule 8D- onus on Assessing Officer to show nexus between expenditure and tax-free income

The AO can not apply Rule 8D without pointing out any inaccuracy in the method of apportionment or allocation of expenses as adopted by the assessee. Rule 8D r.w.s. 14A(2) can be invoked only if the AO having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of expenditure incurred” in relation to tax-free income.

DCIT Vs. Jindal Photo Limited,
I.T.A. No. 4539/Del./2010
(Assessment Year: 2007- 08)
ITAT DELHI

Please become a Premium member. If you are already a Premium member, login here to access the full content.