AO cannot disallow expense U/s. 14A without recording his dis-satisfaction

The Assessing Officer did not specifically record that he is not satisfied with the correctness of the claim of the assessee in respect of the expenditure in relation to the income which does not form part of the total income under the Act. However, he felt obliged and going by the presence of Rule 8D that once Section 14A is attracted, the disallowance is to be made as per Rule 8D only which has been prescribed by the Legislature. The Assessing Officer has not adverted to the plain language of sub­section (2) of Section 14A. The fact that the CIT(A) and ITAT were not satisfied with the asses...