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| The Tax Publishers2019 TaxPub(DT) 5201 (Guj-HC) INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(ii)
Since investments having yielded tax free income were made out of sufficient own funds available with assessee, therefore, no disallowance of interest expenditure under section 14A read with rule 8D(2)(ii) was called for.
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Disallowance under section 14A - Expenditure against exempt income - Interest expenditure - Assessee having sufficient own funds
Assessee earned tax free dividend income on shares but claimed no disallowance under section 14A. AO invoked rule 8D and disallowed interest expenditure as per rule 8D(2)(ii).Held: Assessee was haivng sufficient own funds so as to make concerned investments in shares, accordingly, it could be safely presumed that no interest bearing funds had been diverted for the purpose and accordingly, no disallowance of interest expenditure under section 14A was called for.
Relied:CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom)2009 TaxPub(DT0 1275 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(iii)
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