Whether disallowance can be made u/s 14A for the interest on borrowed fund even if it is explained that the funds utilised for investments are not borrowed funds?

Rane Brake Lining Ltd Vs ITO (ITAT Chennai)- A perusal of the assessment order clearly shows that the Assessing Officer has not invoked the provisions of sec. 14A. In fact the Assessing Officer has pointed out that the total investment in shares as on 31.03.2003 was Rs. 26,00,31,694/- which included a sum of Rs. 5,28,82,350/- invested during the year. No dividend income has also been admitted during the relevant assessment year. A peRs.rusal of the order of the learned CIT(A) clearly shows that the assessee had put forward the plea that it had surplus and reserves sufficient to cover such inve...