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| The Tax Publishers2021 TaxPub(DT) 2091 (Del-Trib) INCOME TAX ACT, 1961
Section 14A
Since rule 8D could not be invoked for any assessment year prior to assessment year 2008-09, then in assessment year 2007-08 also same cannot be held to be applicable. Further, assessee's own funds were much more than investment and it could be reasonably inferred that amount of investment could not be said to be made from borrowings but out of assessee's own funds. Therefore, no disallowance was called for.
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Disallowance udner section 14A - Expenditure against exempt income - Applicability of rule 88 - Assessee having sufficient own funds
Assessee received dividend income which was claimed as exempt and no disallowance was made by the assessee under section 14A in respect of such dividend income received. AO invoked rule 8D and worked out disallowance. Held: Since rule 8D could not be invoked for any assessment year prior to assessment year 2008-09, then in assessment year 2007-08 also same cannot be held to be applicable. Further, assessee's own funds were much more than investment and it could be reasonably inferred that amount of investment could not be said to be made from borrowings but out of assessee's own funds. Therefore, no disallowance was called for.
Followed:Essar Teleholdings Ltd. (TS-35-SC-2018) : 2018 TaxPub(DT) 0652 (SC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
INCOME TAX ACT, 1961
Section 92C
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