Section 14A disallowance unjustified if Interest Free Funds exceeds Investment Value

Kingfisher Finvest India Ltd. Vs. DCIT (ITAT Bangalore) The issue under consideration is whether the disallowance made by AO u/s 14A of the Act is justified in law? ITAT states that if the interest free funds available with the assessee is more than the value of investments, then the presumption is that the assessee has used interest free funds for making investments. This view is supported by the decision rendered by Hon’ble Supreme Court in the case of Reliance Industries Ltd. There should not be any dispute that, if the assessee is able to demonstrate that the interest free funds availabl...