2017 (9) TMI 531

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..... 79.30lacs" without appreciating that the A.O. had correctly made addition of Rs. 79.30 lacs in accordance with the provision of Section 14A r.w. Rule 8D of the Act? B. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in directing the Assessing Officer not to make any disallowance u/s. 14A of the Act while computing book profit u/s. 115JB of the Act?" 2. The first question pertains to the decision of the Tribunal to delete the disallowance of a sum of Rs. 79.30 lakhs made by the Assessing Officer and confirmed by Commissioner of Income Tax (Appeals) under section 14A of the the Income Tax Act, 1961 ('the Act' for short). The second question is whether the disallowance under secti....

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.... if there are interest free funds available to an assessee sufficient to meet its investments and at the same time the assessee has raised a loan it can be presumed that the investments were from interest free funds available, and, accordingly, no disallowance under section 14A in respect of interest payment can be made in such a situation." 5. Learned counsel for the Revenue was unable to point out that these observations on facts by the Tribunal to the effect that the assessee had interest free funds far in excess yield tax exempt income was wrong. That being the position as held by this Court in number of occasions including judgments in case of Deputy Commissioner of Income Tax Vs. Vasco Sales & Marketing Corpn. reported in 66 taxman....