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2010 (11) TMI 705 - AT - Income TaxDisallowance u/s.14A - Rule 8D of rules - A nexus is required to be established between the investments and the borrowings - assessee has borrowed funds an advance on a lower rate of interest. After discussing the details of advance to certain parties a proportionate interest expense disallowance of Rs.5,15,689/- was made - In the case of Reliance Utilities and Power Ltd. (2009 -TMI - 32150 - HIGH COURT BOMBAY). Once the Hon'ble Court has taken a view that the assessee possessed sufficient interest-free funds of its own, then the presumption stands established that the investment towards alleged interest-free funds were out of the available interest-free reserves - It was held that no part of interest on borrowings should be disallowed on the basis that the investments were made out of interest bearing funds - Decided in favour of the assessee by way of remand to AO
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