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2012 (7) TMI 127 - AT - Income TaxDisallowance u/s 14A by invoking Rule-8D - interest claim of the assessee is disallowable on the ground that the assessee has used the interest bearing borrowed funds in the investment of shares - Held that:- The interest expenses is allowable under section 36(1)(iii) such disallowance cannot be made in case where the assessee is having sufficient interest free funds - As decided in case of CIT vs. Hero Cycles Limited, 323 [2009 (11) TMI 33 (HC)] wherein it has been held that disallowance under section 14A is not permissible where no nexus between the expenditure incurred and income generated has been established - the admitted fact that the assessee was having sufficient own interest free fund to cover the investment made in shares no disallowance can be made under section 14A and Rule 8D can be applicable only where disallowance of interest on borrowed capital warrant for expenses out of such borrowed capital with the amount relating to investment in shares and search and not ascertainable - decided against revenue.
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