AO not bound to follow formula prescribed in rule 8D to compute disallowance u/s. 14A

Pr. CIT Vs Britannia Industries Ltd (Calcutta High Court) If an assessing officer doubts the quantum of expenditure incurred towards exempted income, is it mandatory for the assessing officer to apply the formula prescribed in rule 8D of the Income Tax Rules, 1962 or can he take a view otherwise? This is the question which is involved in this appeal. In the assessee’s case, the assessing officer took the latter course while dealing with expenditure shown by the assessee towards exempted income, being income from dividend in this case. Rule 8D of the Income Tax Rules will apply only for asse...