Satisfaction must be recorded before invoking provision of section 14A read with Rule 8D

Issue before tribunal: Whether disallowance can be made under provision of Section 14 A read with Rule 8D on dividend income claimed under section 10 (34) of the Income-tax Act. Brief Facts: Assessee was engaged in the business of share broking and filed its return of income declaring an income of Rs.5,48,588/-. During assessment proceedings, the A.O. observed that the assessee had earned exempt income. Assessee was explained to show cause and being satisfied with the reply of the assessee AO made disallowance u/s 14A. Contention of the revenue: Non recording of satisfaction by A.O. cannot ...