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Interest cannot be disallowed if assessee had ample funds at the time of investing in subsidiary companies
Case Law Details
- Case Name
- Mid- Day Multimedia Ltd Vs Dy. Commissioner of Income Tax (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2006- 07
- Courts
- All ITAT, ITAT Mumbai
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Interest paid on borrowed funds cannot be disallowed when the assessee had ample funds at the time of investing in the equity of subsidiary companies
Mid- Day Multimedia Ltd Vs Dy. CIT (ITAT Mumbai)- The provisions of rule 8D of the Rules which have been notified with effect from March 24, 2008, would apply with effect from assessment year 2008-09. Even prior to assessment year 2008-09, when rule 8D was not applicable, the AO had to enforce the provisions of sub-section (1) of section 14A. For that purpose, the AO is duty bound to determine the expenditure which has been incurred in relation t...
