|The Tax Publishers2021 TaxPub(DT) 1067 (Hyd-Trib)
INCOME TAX ACT, 1961
Section 14A Section 8D
Where assessee had made the entire investment out of its non-interest-bearing funds in its sister company, then provisions of section 14A will not be applicable.
Disallowance under section 14A - Expenditure against exempt income - Investment made out of own funds in subsidiary company -
Assessee made investment in its own subsidiary company. AO after perusing the amount of investment and the legal provisions existing with respect to exempt income made disallowance under section 14A read with rule 8D. Held: Assessee had made the entire investment in its subsidiary companies out of its non-interest-bearing funds because the assessee's equity share and accumulated profit were more than the investment made in the subsidiary companies. Therefore, neither any interest cost could be attributed for making such investment nor any other cost because the entire investment was made in its own subsidiary company. Therefore, addition made by AO was required to be deleted.
FAVOUR : In favour of assessee.
A.Y. : 2012-13 to 2014-15
IN THE ITAT, HYDERABAD BENCH
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