Adani - Section 14A disallowance
Facts
Section 14A disallowance for expenditure incurred to earn exempt dividend income.
Issue
Rule 8D mechanical application vs. nexus-based disallowance.
Held
Rule 8D applies only after AO records satisfaction that the assessee's suo-motu disallowance is incorrect.
Ratio
Section 14A + Rule 8D require recorded satisfaction; mechanical application is reversible.
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