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2019 (3) TMI 998 - AT - Income TaxDisallowance u/s 14A r.w.r.8D - own funds exceeding the investments held - HELD THAT:- Assessee’s own funds in the shape of Share Capital & Free Reserves far exceeded the investment held by the assessee and the investments got reduced in the impugned AY. Therefore, in terms of binding decision rendered in CIT Vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] & CIT Vs. HDFC Bank Ltd.[2014 (8) TMI 119 - BOMBAY HIGH COURT] a presumption was to be drawn in assessee’s favor that the investments were made out of interest free funds available with the assessee. Therefore, interest disallowance u/r 8D(2)(ii) could not be held to be justified. We order so. Expense disallowance u/r 8D(2)(iii) - suo moto disallowance by assessee - HELD THAT:- The assessee has earned the stated exempt dividend income only from one investment i.e. DWS Ultra Short-Term Fund. The average investments in this fund is ₹ 25.49 Lacs & 0.5% of the same comes to ₹ 12,749/- which is less than suo-moto disallowance of ₹ 42,572/- offered by the assessee. This computation is in line with the decision of rendered in ACIT Vs. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance, as computed by Ld. AO also could not be sustained. Thus the suomoto disallowance already offered by the assessee was justified and therefore, additional disallowance as sustained by first appellate authority was to be deleted.
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