https://www.taxtmi.com/caselaws?id=381086 Where the assessee has sufficient interest-free own funds, a presumption arises that investments, capital advances and related outlays are made from those funds rather than borrowed money, and disallowance under section 36(1)(iii) cannot rest on a contrary assumption. Under section 14A read with Rule 8D, the disallowance must be confined to the exempt income actually earned, and the interest limb is not sustainable where own funds cover the investments. For section 80IA, the eligible unit's profits could not be denied in full without a proper reallocation exercise, and at most a proportionate adjustment could be considered. The Revenue's objections were rejected and the assessee's relief sustained. en-us Fri, 24 May 2019 00:00:00 +0530 Mon, 03 Jun 2019 14:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=381086 Where the assessee has sufficient interest-free own funds, a presumption arises that investments, capital advances and related outlays are made from those funds rather than borrowed money, and disallowance under section 36(1)(iii) cannot rest on a contrary assumption. Under section 14A read with Rule 8D, the disallowance must be confined to the exempt income actually earned, and the interest limb is not sustainable where own funds cover the investments. For section 80IA, the eligible unit's profits could not be denied in full without a proper reallocation exercise, and at most a proportionate adjustment could be considered. The Revenue's objections were rejected and the assessee's relief sustained. Case-Laws Income Tax Fri, 24 May 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=381086