https://www.taxtmi.com/caselaws?id=214552 Where an assessee has substantial share capital, reserves and other interest-free funds sufficient to cover investments in shares yielding exempt income, no presumption arises that borrowed funds were used for those investments. The analysis states that disallowance under section 14A requires a nexus between the expenditure and the exempt income, and that interest cannot be disallowed on a presumed diversion of borrowed funds when own funds are adequate. On those facts, Rule 8D had no application, and the disallowance and additions were deleted. en-us Fri, 08 Jun 2012 00:00:00 +0530 Tue, 12 Apr 2016 15:58:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=214552 Where an assessee has substantial share capital, reserves and other interest-free funds sufficient to cover investments in shares yielding exempt income, no presumption arises that borrowed funds were used for those investments. The analysis states that disallowance under section 14A requires a nexus between the expenditure and the exempt income, and that interest cannot be disallowed on a presumed diversion of borrowed funds when own funds are adequate. On those facts, Rule 8D had no application, and the disallowance and additions were deleted. Case-Laws Income Tax Fri, 08 Jun 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=214552