https://www.taxtmi.com/caselaws?id=462045 ITAT Mumbai held that notional interest on loans to subsidiaries cannot be disallowed when assessee has sufficient interest-free funds available. Following precedent from Reliance Utilities case, presumption is that interest-free investments are made from interest-free funds when mixed funds exist. For section 14A disallowance, AO must record satisfaction on incorrectness of claim and consider only investments yielding exempt income per Supreme Court ruling in Maxopp Investment. Matter restored to AO for recomputation of section 14A disallowance and book profit computation under section 115JB. Appeals allowed for statistical purposes. en-us Mon, 20 Nov 2023 00:00:00 +0530 Fri, 16 May 2025 14:45:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=462045 ITAT Mumbai held that notional interest on loans to subsidiaries cannot be disallowed when assessee has sufficient interest-free funds available. Following precedent from Reliance Utilities case, presumption is that interest-free investments are made from interest-free funds when mixed funds exist. For section 14A disallowance, AO must record satisfaction on incorrectness of claim and consider only investments yielding exempt income per Supreme Court ruling in Maxopp Investment. Matter restored to AO for recomputation of section 14A disallowance and book profit computation under section 115JB. Appeals allowed for statistical purposes. Case-Laws Income Tax Mon, 20 Nov 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=462045