Allowing the appeal of the assessee the Tribunal held that ; where assessee had sufficient interest free own funds to cover investments in shares, mutual funds, etc. which generated exempt dividend, no disallowance can be made. ( AY.2008 -09)
Tata Hitachi Construction Machinery Company Ltd. v. DCIT (2018) 170 ITD 720 /65 ITR 86 (SN)(Bang) (Trib.)
S. 14A : Disallowance of expenditure – Exempt income –Sufficient interest free own funds to cover investment in shares and mutual funds etc –No disallowance can be made [ R.8D(2)(ii) ]