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| The Tax Publishers2020 TaxPub(DT) 1299 (Pune-Trib) INCOME TAX ACT, 1961
Section 14A, rule 8D(2)(ii)
As investments having yielded tax free income had been made out of interest free funds, therefore, no disallowance of interest under section 14A read with rule 8D(2)(ii) was called for.
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Disallowance under section 14A - Expenditure against exempt income - Disallowance of interest expenses under rule 8D(2)(ii) - Assessee having sufficient own funds
AO made disallowance under section 14A read with rule 8D(2)(ii) in respect of proportionate interest expenditure incurred for earning exempt income on investments in shares. Assessee's case was that without appeciating that interest free own funds available with assessee were far more than the tax free investments made. Held: Since interest free funds available with assessee were in excess of investments, investments could be presumed to have been out of interest free funds and accordingly, no disallowance under section 14A read with rule 8D(2)(ii) was called for.
Followed: HDFC Bank Ltd. v. Dy. CIT & Ors. (2016) 383 ITR 529 (Bom) : 2016 TaxPub(DT) 1316 (Bom-HC)
REFERRED :
FAVOUR : in assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 2(22)(e)
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