The Tax Publishers2019 TaxPub(DT) 8445 (Ahd-Trib)

INCOME TAX ACT, 1961

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

As investments leading to tax free income were made out of non-interest bearing own funds, therefore, no disallowance was required to be made under rule 8D(2)(ii).

Disallownace under section 14A - Expenditure against exempt income - Invocation of rule 8D(2)(ii) - Assessee having sufficient own funds

Assessee earned tax free dividend income on investments in shares. AO invoked section 14A read with rule 8D(2)(ii) and disallowed interest expenditure. Assessee pleaded to have sufficient own funds.Held: As evident, interest-free funds generated or available with assessee were sufficient to meet investment and accordingly could be safely presumed that investments were made out of non-interest bearing own funds and, therefore, no disallowance was required to be made under rule 8D(2)(ii).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 14A Section 115JB

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