On appeal the Tribunal held that the assessee had sufficient funds of its own to invest in shares. And since the assessee had common funds consisting of its own funds and borrowed funds and if the assessee’s own funds were sufficient to invest in non-business activities, a presumption was drawn that the investment was made out of the assessee’s own funds. Thus, no disallowance under rule 8D(2)(ii) was warranted. Not all investments become the subject matter of consideration when computing disallowance under section 14A read with rule 8D . The disallowance had to be in relation to the income which did not form part of the total income and this could be done only by taking into consideration the investment which had given rise to this income which did not form part of the total income.  ( AY.2010-11)