Proportionate disallowance of interest U/s. 14A not warranted if interest free own fund exceeds investment: SC

CIT Vs UTI Bank Ltd (Supreme Court of India) SC upheld its judgment in ‘South Indian Bank Ltd. v. Commissioner Of Income Tax’ and held that the proportionate disallowance of interest is not warranted, under Section 14A of Income Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments. FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER In view of the findings of fact noticed by the High Court, the legal issue relating to disall...