Tribunal held that where assessee had interest free funds which is more than investments made giving rise to exempt income, no disallowance of interest expense could be made under section 14A read with rule 8D. Tribunal also held that disallowance under rule 8D(2)(iii) should be restricted only to investments giving rise to exempt income (AY. 2009-10)
Tata Power Co. Ltd. v. PCIT (2021) 186 ITD 82 (Mum.)(Trib.)
S.14A : Disallowance of expenditure-Exempt income-Interest free funds is more than investments made-No disallowance of interest can be made-Administrative expenses-Disallowance is restricted only to investments giving rise to exempt income. [R. 8D]