The Tax Publishers2021 TaxPub(DT) 3201 (Chen-Trib)

INCOME TAX ACT, 1961

Section 14A Rule 14A Rule 8D(2)(ii)

As assessee had own funds in excess of investments made in shares and securities which yielded exempt income, therefore, no disallowance was called for under rule 8D(2)(ii).

Disallowance under section 14A - Expenditure against exempt income - Interest expenses - Assessee having sufficient own funds

Assessee earned tax-free dividend income and worked out suo motu disallowance under section 14A. AO invoked rule 8D(2)(i) and disallowed interest expenses. Assessee pleaded to have sufficient own funds. Held: Assessee filed necessary details to prove that it had own funds in excess of investments made in shares and securities which yielded exempt income, therefore, no disallowance was called for under rule 8D(2)(ii).

Followed:CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom-HC) : 2014 TaxPub(DT) 3351 (Bom-HC) and 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. : 2013-14 & 2014-15


INCOME TAX ACT, 1961

Section 14A Rule 8D(2)(iii)

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