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2019 (4) TMI 512 - AT - Income TaxDisallowance u/s 14A - interest free funds available with the assessee is more than investment in tax free securities - HELD THAT:- In the case of CIT and Another Vs. Microlabs Ltd. [2016 (4) TMI 219 - KARNATAKA HIGH COURT] we examine the amount of interest free funds available with the assessee and compare it with investment in tax free securities. We find that assessee was having interest free own funds in the form of share capital and reserves and surplus. In addition to that, the assessee is also having fund in the form of CCDs on which no interest is being paid by the assessee. If we add up these two amounts, it is seen that total interest free funds available with the assessee is of as against the investment in tax free securities of ₹ 51,76,46,752/-. Hence interest free funds available with the assessee is more than investment in tax free securities. Disallowance u/s. 14A r.w.r. 8D(2)(iii) being 0.5% of average investment - there is no infirmity in the order of CIT (A) in that regard because learned AR of the assessee has also fairly conceded in that regard. This disallowance u/s. 14A r.w.r. 8D(2)(iii) of IT Rules, 1962 being 0.5% of average investment is upheld and accordingly, ground no. 2(c) is rejected.
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