AO disallowed interest in respect of investment made in shares of companies out of interest bearing funds u/s 36(1)(iii) on the ground of non-business purpose. CIT(A) held that investments are for business purpose therefore, no disallowance u/s 36(1)(iii) required. However, he made disallowance u/s 14A of the Act. The Tribunal held that investment in the companies were for business purpose and therefore, interest was allowable u/s 36(1)(iii) of the Act. Further, it was held that such investment cannot be considered for the purpose of Rule 8D(2)(ii). Also, interest attributable to such investment cannot be considered for the purpose of Rule 8D(2)(ii) as such interest is allowable as business expenditure u/s 36(1)(iii). (AY. 2009-10)