Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 829 - AT - Income TaxAddition u/s 14A r.w.r. 8D - Suo moto addition made by assessee - CIT(A) held that the provision of Rule 8D(2)(ii) were applicable in the facts of the case - According to the Ld. AR, the assessee's investment in earning the dividend income is from interest free source meaning that assessee had its own fund for investment for earning the exempt income. Therefore, according to him, Rule 8D(2)(ii) will not be applicable - HELD THAT:- Facts as discerned from the records, we safely infer that since assessee had own fund which was sufficient to make investment fund which yielded exempt income, no disallowance of interest invoking Rule 8D(ii) of the Rules was warranted. For that we rely on case of Reliance Utilities & Powers Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] wherein held that when the assessee is possessed of mixed funds which includes its own funds in sufficient quantity, the presumption is that its own funds were utilised for the advances is to be drawn. The aforesaid view of the Hon'ble Bombay High Court has been approved by the Hon'ble Supreme Court in the case of South Indian Bank Vs. CIT [2009 (1) TMI 4 - BOMBAY HIGH COURT] - Therefore, Rule 8D(2)(ii) is not applicable in this case. Ergo the assessee succeeds and therefore, the disallowance made by the AO applying Rule 8D(2)(ii) is deleted.
|