The Appellate Tribunal considered various issues. Firstly, on ...

Disallowance u/s. 14A r.w. Rule 8D(ii) not warranted as interest-free funds sufficient for exempt income investment. Labor expenses disallowed, vehicle running expenses upheld.

Case Laws     Income Tax

June 6, 2024

The Appellate Tribunal considered various issues. Firstly, on disallowance u/s. 14A r.w. Rule 8D(ii), it was held that no disallowance of interest expenditure was warranted as the company had sufficient interest-free funds to source its investments in exempt income-yielding shares. The Tribunal referred to relevant case law to support this decision. Secondly, on addition towards various expenses, the Tribunal upheld the CIT(Appeals) decision to allow deduction under section 37 of the Act as the Assessing Officer failed to provide justifiable reasons for disallowance. Lastly, on addition u/s 68 for unexplained loan transaction, the Tribunal concurred with the CIT(Appeals) that the loan raised from a lender company was not unexplained cash credit as the identity of the lender was proven. The Tribunal dismissed the revenue's appeals on all grounds.

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