https://www.taxtmi.com/caselaws?id=775426 The ITAT Kolkata reversed the CIT(A)'s disallowance under Rule 8D(2)(iii), directing the AO to restrict the disallowance to only those investments that actually yielded exempt income, in line with Cal HC precedents. The disallowance of 0.5% on the average value of all equity investments irrespective of exempt income was set aside. Regarding interest-free loans advanced to associates/subsidiaries, the ITAT held that the assessee demonstrated sufficient own interest-free funds and commercial expediency for such advances. Consequently, the disallowance under section 36(1)(iii) confirmed by the CIT(A) was deleted, following the Bombay HC ruling in Reliance Utilities & Power Ltd. Both grounds raised in the appeal were allowed. en-us Tue, 22 Jul 2025 00:00:00 +0530 Fri, 25 Jul 2025 08:28:06 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=775426 The ITAT Kolkata reversed the CIT(A)'s disallowance under Rule 8D(2)(iii), directing the AO to restrict the disallowance to only those investments that actually yielded exempt income, in line with Cal HC precedents. The disallowance of 0.5% on the average value of all equity investments irrespective of exempt income was set aside. Regarding interest-free loans advanced to associates/subsidiaries, the ITAT held that the assessee demonstrated sufficient own interest-free funds and commercial expediency for such advances. Consequently, the disallowance under section 36(1)(iii) confirmed by the CIT(A) was deleted, following the Bombay HC ruling in Reliance Utilities & Power Ltd. Both grounds raised in the appeal were allowed. Case-Laws Income Tax Tue, 22 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=775426