The Assessing Officer invoked rule 8D merely on the general observation that the assessee had incurred expenditure such as salaries, rent and audit fees without first examining the books of account or recording dissatisfaction regarding the assessee’s claim that no expenditure had been incurred for earning exempt income. The Tribunal held that such satisfaction is a mandatory condition precedent for invoking rule 8D. In the absence of proper satisfaction, the disallowance under section 14A as well as the restriction thereof by the Commissioner (Appeals) could not be sustained. (AY. 2014-15, 2015-16, 2017-18 & 2018-19).