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2011 (3) TMI 1440 - HC - Income Tax
Dis-allowance of interest on borrowed funds u/s. 14A – assessee contended that majority of its investment if tax free securities were made before F.Y.97-98, thus amount invested in tax free securities are not from borrowed funds - Held that:- Assessee had demonstrated that it has utilized its own funds for the purpose of making investment in shares, etc. from which tax free income were earned. It is also not in dispute that the interest bearing borrowed funds were utilized for its own business purposes from which taxable income were earned by the assessee. CIT(Appeals) and Tribunal both on facts found that the assessee did not invest borrowed fund for earning interest free income, applying provision of Section 14A for taxing such interest was not justified - Decided in favor of assessee