Dismissing the appeal of the revenue the Court held that, Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) does not lay down a proposition that the moment it is demonstrated that the assessee had availed of mixed funds, i.e., interest-free as well as interest bearing funds and utilized them for making investments into securities earning tax-free income and the rest applicability of section 14A read with rule 8D would be automatic Resorting to the method prescribed under rule 8D is not automatic-Deletion of addition by the Tribunal is held to be justified. (AY. 2010-11)
CIT v. Shreno Ltd. (2018) 409 ITR 401/( 2019) 261 Taxman 239 (Guj.)(HC)
S. 14A : Disallowance of expenditure – Exempt income – Recording of satisfaction- Mixed funds – Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) does not lay down a proposition that the moment it is demonstrated that the assessee had availed of mixed funds, i. e., interest-free as well as interest bearing funds and utilized them for making investments into securities earning tax-free income and the rest applicability of section 14A read with rule 8D would be automatic Resorting to the method prescribed under rule 8D is not automatic-Deletion of addition by the Tribunal is held to be justified. [R. 8D]