| |
| The Tax Publishers2021 TaxPub(DT) 5942 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(ii)
As own funds of assessee were more than the investment bearing tax-free income, therefore, no disallowance of interest was callied for udner section 14A.
|
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 on investments in shares but claimed no disallowance under section 14A. AO invoked rule 8D(2)(ii) and disallowed interest expenses. Assessee pleaded to have sufficient own funds. Held: As per assessee's balance sheet it was having its share capital in sum of Rs. 9,580,080.00 and reserve and surplus in sum of Rs. 42,167,466.71. The investment had been shown in sum of Rs. 5,129,890. The trading stock had also been shown in sum of Rs. 25,670,681. All these figures spoke that own funds of assessee were more than the investment. Accordingly, no disallowance of interest was called for under section 14A.
Relied:CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom-HC) : 2009 TaxPub(DT) 1275 (Bom-HC) & Maruti Udyog Ltd. v. Dy. CIT (2005) 92 ITD 119 (Del-Trib) : 2005 TaxPub(DT) 770 (Del-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(iii)
 SUBSCRIBE FOR FULL CONTENT
|