The Assessing Officer invoked section 14A without recording any dissatisfaction regarding the correctness of the assessee’s computation of expenditure relatable to exempt income. The Tribunal held that recording of satisfaction under section 14A(2) is a mandatory jurisdictional requirement and there can be no deemed or implied satisfaction. Since the Assessing Officer had failed to comply with this statutory requirement, the disallowance under section 14A was rightly deleted. The Tribunal further held that loss arising in the ordinary course of business is deductible as a business loss under section 28 and is distinct from business expenditure governed by sections 30 to 37. Where the loss has a direct nexus with business operations, it is allowable notwithstanding that it is not covered by the provisions relating to business expenditure. (AY. 2014-15)