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2023 (7) TMI 855 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Investment in shares - HELD THAT:- As investment to the extent in the books of the assessee is nothing but the shares transferred to the assessee pursuant to the aforesaid scheme of amalgamation with Essel Business Process Ltd. The Revenue has not brought any material to controvert the aforesaid facts as emanating from the material placed on record. Therefore, we are of the considered view that such investment cannot be considered for computation of disallowance u/s 14A r.w.r. 8D(2)(ii), since no interest-bearing funds were utilised for the acquisition of the aforesaid investment. Balance investment Hon'ble Supreme Court in South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] held that disallowance under section 14A would not be warranted where interest-free own funds exceed the investment in tax-free securities and in such a case the investment would be presumed to be made out of assessee's own funds. Therefore, we find no merit in disallowance made by the AO and upheld by the learned CIT(A) under section 14A read with Rule 8D(2) - Decided in favour of assessee.
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