DCIT vs. JINDAL PHOTO LTD, I.T.A. No. 4539/Del./2010, ITAT-DELHI, (BENCH –‘G’)
There must be nexus between disallowance of expenditure & Tax free income earned
the assessment order does not evince any such satisfaction of the AO regarding the correctness of the claim of the assessee. As such, Rule 8D of the Rules was not appropriately applied by the AO. It has not been done by the AO that any expenditure had been incurred by the assessee for earning its dividend income. Merely, an ad hoc disallowance was made. The onus was on the AO to establish any such expenditure