The Tax Publishers2019 TaxPub(DT) 2824 (Bom-HC)

INCOME TAX ACT, 1961

Section 14A Rule 8D

Where assessee's capital, profit reserves, surplus and current account deposits were higher than the investments in the tax-free securities, it would have to be presumed that the investments made by the assessee would be out of the interest-free funds available with the assessee.

Disallowance under section 14A - Expenditure against exempt income - Sufficiency of own funds -

Revenue challenged the order of Tribunal deleting the disallowance made by AO under section 14A following case of CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom). Held: In the instant case, undisputedly the assessee's capital, profit reserves, surplus and current account deposits were higher than the investments in the tax-free securities. Thus, it would have to be presumed that the investment made by the assessee would be out of the interest-free funds available with the assessee. Therefore, Tribunal had not erred in dismissing the appeal of the Revenue on this ground.

Followed:CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom) : 2014 TaxPub(DT) 3351 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :


INCOME TAX ACT, 1961

Section 37(1)

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