No Section 14A disallowance without Recording Proper Satisfaction

Indica Industries Pvt. Ltd. Vs ITO (ITAT Delhi) The issue under consideration is whether the disallowance made by AO u/s 14A is justified in law? ITAT states that, it is found as an admitted position that the assessee’s investments were handled by portfolio managers to whom only a particular sum was paid as fees, which along with other direct expenses, being the amount voluntarily disallowed by the assessee. Sub-section (2) of section 14A clearly stipulates that the Assessing Officer shall determine the amount of expenditure incurred in relation to exempt income as per Rule 8D if he, hav...