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| The Tax Publishers2021 TaxPub(DT) 6074 (Kol-Trib) INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(ii)
Where investments bearing tax free income were made out of tax free funds available with assessee,no disallowance of interest was called for under section 14A read with rule 8D(2)(ii).
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Disallowance under section 14A - Exenditure 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 under section 14A. AO invoked rule 8D(2)(ii) and disallowed interest expenses. Assessee pleaded to have sufficient own funds. Held: Assessee had sufficeint own funds in the share of share capital and surlus to make the investments. Therefore, it could be safely resumed that no interest bearing funds had been diverted for the purpose of making investments and accordingly, no disallowance was called for under section 14A read with rule 8D(2)(ii).
Relied:CIT v. REI Agro Industries Ltd. G.A of 2013/ITAT 161 of 2013 dated 23-12-2013 : 2014 TaxPub(DT) 836 (Cal-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(iii)
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