ITAT directs AO to delete Addition due to Disallowance u/s 14A made without recording satisfaction regarding Assessee’s Books of Account

The Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to delete an addition made under Section 14A of the Income Tax Act without recording satisfaction regarding the assessee’s books of accounts. The AO had made a disallowance under Section 14A, which deals with expenses incurred in relation to exempt income. However, ITAT found that the AO failed to record proper satisfaction as required by law regarding the correctness of the assessee’s claim. The ruling emphasizes the need for tax authorities to follow due procedures and ensure proper satisfaction is recorded before disallowing expenses.