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2016 (4) TMI 1405 - AT - Income TaxDisallowance made u/s. 14A r.w.r Rule 8D - assessee argued that investment in shares had been made out of non interest bearing funds - HELD THAT:- We find that the assessee had share capital of ₹ 60,48,00,000/-and reserves & surplus stood at ₹ 1,74,67,67,552/-,whereas the investment was at ₹ 2,06,66,62,442/-,that out of the said investment the assessee had made investment in properties also,that the fresh investment in the shares was not very huge,that it had made strategic invesment,that there was no evidence to prove that borrowed funds were utilised for making investment in shares. In our opinion,the settled position of law stipulate that the if the assessee has sufficient own funds then it should be presumed that investment was not made from borrowed funds. Considering the availability of funds we are of the opinion that the AO was not justified in disallowing interest expenditure.Similarly, disallowance as per the provisions of section 14A r.w.rule 8D of the Rules cannot be made in a mechanical manner.Thirdly,the disallowance cannot be more than the expenditure claimed by an assessee. See K. RAHEJA CORPN. (P) LTD. [2011 (8) TMI 148 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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