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2017 (9) TMI 485 - HC - Income Tax
Disallallowance of expenditure u/s 14A - Assessee failed to prove that the investments was made out of interest free funds only - AO disallowed interest expense on basis substantial borrowings taken for investments - CIT(A) confirmed deicison of AO - Formula for calculating interest to be disallowed for the purpose of section 14A given under clause(ii) of subrule( 2) of Rule 8D- Held that:- Amount of interest expenditure would be the interest paid by the assessee on the borrowings minus the taxable interest earned during the FY for purpose of disallowance u/s14A.- Decided in favor of assessee.