2013 (6) TMI 755

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.... of I T Rules without appreciating that the appellant had sufficient interest free funds to make the investments. 2 On the facts and in the circumstances of the case and in laws the Commissioner of Income Tax(Appeals) erred in not considering the fact that the borrowed funds were not utilized for the purpose of making investment in the shares." 3 The only issue arising from the appeal of the assessee is whether in the facts and circumstances of the case, the Commissioner of Income Tax(Appeals) is justified in confirming the disallowance made by the Assessing Officer u/s 14A of Rs. 17,65,069/- by applying Rule 8D of the I T Rules. 3.1 During the course of assessment proceedings, the Assessing Officer proposed to make the disallowance u/s ....

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....'s own fund is sufficient for making the investments in the shares of the sister concern. Further, there is no new investments during the year and all investments in the earlier year and the revenue has not made any disallowance u/s 14A in the earlier year. 4.1 On the other hand, the ld DR has relied upon the orders of the authorities below and submitted that Rule 8D is applicable for the year under consideration; therefore, the Assessing Officer has disallowed the same by computing the disallowance on account of interest as well as administrative expenditure as per the formula provided u/r 8D of the I T Rules. The assessee has used the mixed funds comprising own funds and borrowed funds; therefore, disallowance is required to be made u/r ....