AO not recorded satisfaction- Section 14A disallowance invalid

Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court) So far as the claim of the assessee under Section 14A of the Act is concerned, sub-Section (2) and (3) of Section 14A of the Act read with Rule 8D of the Rules prescribe a formula for determination of expenditure incurred in relation to income, which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. The sine qua non for invocation of power under Section 14A of the Act read with Rule 8D of the Rules is the recording of satisfaction by the As...