DLF Commercial Developers Ltd. v. Dy. CIT (2018) 164 DTR 207/192 TTJ 769 (Delhi)(Trib.)

S. 14A : Disallowance of expenditure – Exempt income -Share capital and reserve and surplus is higher than the investment in shares -No disallowances can be made [ R.8D(2)(ii) ]

It has been held by the appellate tribunal that if an assessee has interest free funds as well as interest bearing funds at its disposal, then the presumption would be that investments were made from interest free funds at its disposal. Since the assessee’s share capital along with reserve and surplus is far in excess of its investment in shares, etc. yielding exempt income, no disallowance can be made. (AY.2008-09)