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2019 (7) TMI 354 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D(2)(ii) - sufficiency of own funds - whether own interest free funds are sufficient to cover the investments? - HELD THAT:- A perusal of Balance sheet shows that the assessee is having own interest free funds comprising of share capital, reserves and surplus aggregating to ₹ 7,54,94,323/-, as against the investments of ₹ 4,26,14,226/-. Since, the assessee’s own interest free funds are sufficient to cover the investments it is presumed that entire investments are made from non-interest bearing funds. The Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] has held that where the assessee is having both interest free funds and interest bearing funds, the presumption is that the investments are made from interest free funds. Accordingly, the disallowance u/s. 14A r.w. Rule 8D(2)(ii) in respect of interest expenditure is deleted. - Decided in favour of assessee.
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