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2019 (12) TMI 1417 - ITAT KOLKATADisallowance u/s 14A - HELD THAT:- As perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We note that the assessee is in appeal before us against the disallowance under Rule 8D(2)(ii) read with Section 14A - assessee submitted before us the Balance sheet of the assessee company as on 31.03.2013. On perusal of Balance sheet, we noticed that own funds of the assessee company is ₹ 1,15,771/- lakhs, which is more than the investments in shares and securities to the tune of ₹ 18,089/- lakhs. Since Company’s net owned funds in the form of equity capital and free reserves were substantially more than the cost of share investment, yielding dividend income, no part of the interest paid is disallowable because borrowed funds were not used for acquiring shares. For that we rely on the judgment in the case of CIT vs HDFC Bank Ltd.[2016 (3) TMI 755 - BOMBAY HIGH COURT] Therefore, the disallowance under Rule 8D(2)(ii) read with Section 14A is not attracted in assessee’s case hence we direct the Assessing Officer to delete the disallowance under Rule 8D(2)(ii) of the IT Rules. Appeal of the assessee is allowed.
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