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| The Tax Publishers2020 TaxPub(DT) 2284 (Kol-Trib) : (2020) 183 ITD 0891 : (2020) 208 TTJ 0067 : (2020) 081 ITR (Trib) 0061 INCOME TAX ACT, 1961
Section 14A
As investments bearing tax freed income were made out of sufficient own funds available with assessee, therefore, no disallownace of interest expenses under section 14A was called for.
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Disallowance under section 14A - Expenditure against exempt income - Interest expenses under rule 8D(2)(ii) - Assessee having sufficient own funds
Assessee earned tax free dividend income but claimed no disallowance of interest expenses under section 14A. AO invoked rule 8D(2)9ii) and worked out disallowance. Assessee contended that investments were made out of own funds available with assessee.Held: Since own funds of the company were to the tune of Rs. 35 crores as compared to investments of onlty Rs. 20 crores as at the end of the year, therefore, it could be safely presumed that assessee was having sufficient own funds to invest in shares and investments were made out of own funds and, therefore, no disallowance of interest expenses under section 14A was called for.
Relied:CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(iii)
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