2021 (3) TMI 1493

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....ct) by the ld. Asst. Commissioner of Income Tax, Circle 2(1)(1), Mumbai (hereinafter referred to as ld. AO). 2. The ground No.1 raised by the Revenue is challenging the action of the ld. CIT(A) in deleting the interest disallowance made u/s.14A of the Act r.w. Rule 8D(2)(ii) of the Rules on the ground that the assessee bank is having sufficient interest free funds to make investments. 3. We have heard rival submissions and perused the materials available on record. We find that assessee had earned exempt income of Rs.58,43,00,883/- by way of interest on tax free bonds, dividends on shares and interest which is exempt u/s.10(15)(iv)(c ) & (f) of the Act. The assessee also holds certain securities as stock in trade. The assessee pleaded....

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....urisdictional High Court which has been followed by the ld. CIT(A) while granting relief to the assessee, we find no infirmity in the said order of the ld. CIT(A). Accordingly, the ground No.1 raised by the Revenue is dismissed. 4. The ground No.2 raised by the Revenue is challenging the action of the ld. CIT(A) wherein he had directed the ld. AO to exclude the investments that were held as 'stock in trade' while computing disallowance u/s.14A of the Act r.w.Rule 8D(2) of the Rules. We find that the ld. CIT(A) had directed the ld. AO to ignore the investment in shares and securities that were held as 'stock in trade' for the purpose of computing disallowance u/s. 14A of the Act r.w.Rule 8D(2) of the Rules, by placing reliance on the deci....