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2022 (3) TMI 1121 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - Sufficiency of own funds - HELD THAT:- As is evident from the balance-sheet of the assessee as on 31.03.2014, the assessee had sufficient interest free funds in the form of own capital and unsecured loans available in the year under consideration; and, since the same were sufficient to make investments in mutual funds and shares, there was no utilization of interest bearing borrowed funds by the assessee in mutual funds and shares. On the other hand, the interest bearing borrowed funds were utilized by the assessee for making investment in M/s. Varsha Fashion LLP in the form of partner’s capital; and, since there was no exempt income received by the assessee during the year under consideration as share of profit from the said firm which was exempt from tax and the interest earned by the assessee from the said firm was offered for tax after deducting the interest paid, it was a case where the assessee had actually earned net interest income. As pointed out for the assessee from the income and expenditure account of the assessee for the year under consideration, no deduction on account of any other expenditure was claimed by the assessee - we are of the view that the disallowance made by the Assessing Officer under Section 14A read with Rule 8D, as sustained by the learned CIT(A), is not justified and deleting the same, we allow this appeal of the assessee.
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