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| The Tax Publishers2020 TaxPub(DT) 2507 (Ahd-Trib) : (2020) 183 ITD 0590 INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(ii)/(iii)
Where investments bearing tax-free income were made out of own funds available with assessee, no disallowance of interest expenses under section 14A was called for.
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Disallowance under section 14A - Expenditure against exempt income - Investments in shares of other companies - Assessee having sufficient own funds
Assessee earned tax-free dividend income on investments in shares of other companies but claimed no suo moto disallowance under section 14A. AO invoked rule 8D and disallowed investments in shares of other companies. Held: Since own fund of assessee exceeded the amount of investments, presumption could be drawn that the borrowed funds were not utilised for such investments and accordingly there could not be any disallowance of any interest expenses under section 14A. Regarding disallowance of administrative expenses there was no argument advanced at the time of hearing on such disallowance. Accordingly, disallowance towards administrative expenses was confirmed.
Relied:Pr.CIT v. Shreno Ltd. (2018) 409 ITR 401 (Guj) : 2018 TaxPub(DT) 8013 (Guj-HC).
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 37(1)
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