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2019 (4) TMI 1501 - AT - Income TaxDisallowance u/s 14A - assessee’s own funds are more than total investment, which gives rise to exempt income and in that case it is presumed that the assessee had used own funds for investment which earned exempt income - HELD THAT:- No disallowance can be made under Rule 8D(ii) on account of interest - the assessee drew our attention to the balance sheet of the assessee, wherein, share capital reserve to the tune of ₹ 40,84 cores is available and total investment is ₹ 17.73 crores, which is invested to earn exempt income. There are mixed funds and the AO has not proved any nexus with the earning of exempt income and the invested funds. Once this is the position, the presumption is that the assessee has invested in the investment which gives rise to the exempt income out of own funds in view of HDFC Bank [2014 (8) TMI 119 - BOMBAY HIGH COURT] . MAT - Applicability of provisions of section 115 JB in respect to disallowance of expenditure relatable to exempt income under section.14A r.w Rule 8D - HELD THAT:- The issue is squarely covered by the decision of ITAT Delhi, Special Bench in the case of Vireet Investment Pvt Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein, it is held that while applying the provisions of sect ion 115 JB the computation under Clause (f ) of Explanation (1) to sect ion 115 JB(2), the disallowance is to be made without resorting to the computation as contemplated u/s 14A r.w. Rule 8D of the Rules thereby the CIT(A) relying on the decision of ITAT Delhi SB in the case of Vireet Investment (supra) deleted the disallowance. - Decided against revenue.
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