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| The Tax Publishers2021 TaxPub(DT) 2135 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(iii)
Even if investments were made out of available interest-free fund the same by no stretch of imagination went to prove that no disallowance under rule 8D(2)(iii) was required. Accordingly, disallowance made by AO was justified.
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D(2)(iii) - Assessee pleading to have sufficient own funds
Assessee earned tax-free dividend income but claimed no disallowance under section 14A. AO invoked rule 8D(2)(iii) and computed disallowance under section 14A at the rate of 0.5% of average value of investment. Assessee pleaded to have sufficient own funds. Held: Even if investments were made out of available interest-free fund the same, by no stretch of imagination, went to prove that no disallowance under rule 8D(2)(iii) was required. Accordingly, disallowance made by AO was justified.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2001-02 & 2004-05
INCOME TAX ACT, 1961
Section 33AC
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