Tribunal held that if the interest-free funds were sufficient to meet the investments, the presumption would arise that the investments were out of interest-free funds accordingly the disallowance made under rule 8D(2) was to be deleted. Regarding rule 8D(2)(iii) there was nothing on record that the assessee made disallowance on its own in earning the exempt income. Therefore, the disallowance made by the Assessing Officer as confirmed by the Commissioner (Appeals) was to be sustained. The Department submitted that the assessee stated that no expenditure had incurred towards making the investments and the addition made under rule 8D(2)(iii) was to be upheld. Thus the disallowance made under rule 8D(2)(iii) to an extent of Rs. 1,17,760 was sustained.( AY.2012-13)