TMI Blog2022 (1) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... ere generated in the course of relevant financial year, apart from substantial shareholders funds, presumption gets established that the investments in sister concerns were made by the assessee out of interest free funds and, therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. In reaching this conclusion, the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the availability of Share Capital and Reserves at ₹ 58.16 crore, it is manifested that the amount of such Investments is much less than the amount of shareholders fund. Respectfully following the precedent, we order to delete the disallowance under Rule 8D - Decided in favour of assessee. - ITA No. 1663/PUN/2018 - - - Dated:- 18-1-2022 - SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une of ₹ 98,45,264/- and at the same time the total interest free funds available with the company by way of share capital and reserves and surplus amounted to ₹ 58.16 crore. Not convinced, the AO computed the disallowance under Rule 8D at ₹ 1,59,430/-, being, one half of the average value of investments. The ld. CIT(A) sustained the addition by observing that the presumption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom), has held that where an assessee possessed sufficient interest free funds of its own which were generated in the course of relevant financial year, apart from substantial shareholders funds, presumption gets established that the investments in sister concerns were made by the assessee out of interest free funds and, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reiterated the same view. 6. When we examine the amount of Investments in the extant case at ₹ 98.45 lakh as against the availability of Share Capital and Reserves at ₹ 58.16 crore, it is manifested that the amount of such Investments is much less than the amount of shareholders fund. Respectfully following the precedent, we order to delete the disallowance under Rule 8D amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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