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2015 (11) TMI 399 - HC - Income TaxDisallowance made under section 14A - interest bearing borrowed funds were utilised by the assessee entirely for the purpose of its business and investment in tax-free bonds having been made by the assessee out of its own funds as submittted by revenue - ITAT allowed assessee claim - Held that:- The Commissioner of Income-tax (Appeals) and the Tribunal both held that there was no warrant for such an estimation. The Commissioner of Income-tax (Appeals) held that no interest expenditure can be allocated to the earning of the tax-free income received by the assessee on tax-free bonds. The Tribunal held that the Commissioner of Income-tax (Appeals) rightly interfered with the order of the Assessing Officer. The decision of the Commissioner of Income-tax (Appeals) was upheld by the Tribunal and the view taken by the Commissioner of Income-tax (Appeals) as also the Tribunal is inconsonance with the law laid down by this court in the case of CIT v. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY ]. The view taken also has been in consonance with the law laid down by this court in the case of Godrej and Boyce Mfg. Co. Ltd. v. Deputy CIT reported in [2010 (8) TMI 77 - BOMBAY HIGH COURT ] 328 ITR 81 (Bom). In these circumstances, we find that merely because that there is a common pool of funds, a presumption that the investment yielding tax-free returns is made by the assessee out of its own funds cannot be raised. Such a view of the Tribunal, therefore, does not raise any substantial question of law. - Decided against revenue.
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