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2016 (7) TMI 1041 - AT - Income TaxDisallowance u/s 14A - Held that:- We find that Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. reported at (2009 (1) TMI 4 - BOMBAY HIGH COURT ) has held that if there are funds available, both interest-free and overdraft and / or loan taken, then a presumption would arise that investments would be out of interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. Before us, ld.Sr.DR has not placed any contrary binding decision in its support. no disallowance of interest u/s 14A of the Act can be made in the present case. As far as the issue of net interest for the purpose of disallowance u/s.14A is concerned, we find that the Coordinate Bench of Tribunal in the case of Safar Reality Pvt.Ltd. vs. ACIT (2013 (11) TMI 1588 - ITAT AHMEDABAD) has approved the theory of netting off of interest income with interest expenditure. Considering the totality of the aforesaid facts, we are of the view that in the present case, no disallowance u/s.14A is called for and thus direct the deletion of addition made by the AO. Thus, the ground(s) of assessee are allowed. As far as the appeal of Revenue for AY 2009-10 is concerned, since in AYs 2008-09 & 2009-10 the ground of assessee is decided in assessee’s favour, the ground raised by Revenue has become academic and, therefore, requires no adjudication and therefore dismissed. - Decided in favour of assessee.
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