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2016 (11) TMI 1405 - AT - Income TaxDisallowing the expenses relatable to exempted income by invoking the provisions of Section 14A read with Rule 8D - Held that:- No disallowance u/s Rule 8D can be made as the assessee is having non-interest bearing funds available in the shape of share capital and reserves and surpluses with him amounting to ₹ 285.27 crore which is more than the amount of investment made in interest earning instruments amounting to ₹ 18.19 crores and once availability of amount from interest free fund of the assessee is more than the investment, then a presumption arises that assessee might have invest out of interest free fund available with him. See HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT ). As regards to direct expenditure under Rule 8D (1), there is no dispute. As regards to working of disallowance under Rule 8D (3), the assessee has computed the disallowance and the Assessing Officer could not point out any discrepancy or unreasonableness or could not find any fault in the same. Accordingly, we delete the addition and allow the appeal of the assessee retaining the same to the extent of the assessee suo-moto disallowance of sum of ₹ 11,78,104/-.- Decided in favour of assessee.
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