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The Tax PublishersITA Nos. 1916 to 1918/Bang/2017, ITA No. 2005/Bang/2017
2020 TaxPub(DT) 5254 (Bang-Trib) : (2021) 085 ITR (Trib) 0421INCOME TAX ACT, 1961
Section 14A Rule 8D(2)(ii)
Disallowance out of interest expenditure was not required to be made under rule 8D(2)(ii) if own funds available with assessee were in excess of the value of investments yielding tax-free income.
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Disallowance under section 14A - Expenditure against exempt income - Interest expenses under rule 8D(2)(ii) - Assessee pleading to have 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 worked out disallowance of interest expenses. Assessee's case was that own funds available with assessee were more than the value of investments. Held: Disallowance out of interest expenditure was not required to be made under rule 8D(2)(ii) if own funds available with assessee were in excess of the value of investments yielding tax-free income. Issue was restored to AO for verification afresh.
Relied:Micro Labs Limited (2016) 383 ITR 490 (Karn) : 2016 TaxPub(DT) 2372 (Karn-HC).
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2010-11 to 2012-13
INCOME TAX ACT, 1961
Section 14A
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