Disallowance of interest u/r 8D(2)(ii) unsustainable as investments made out of interest free funds

Express Industrial Services Pvt. Ltd Vs ACIT (ITAT Mumbai) ITAT Mumbai held that as assessee is having sufficient own funds hence investments which yield exempt income can be presumed to be made out of interest free funds. Accordingly, disallowance of interest in terms of rule 8D(2)(ii) of the Income Tax Rules unsustainable. Facts- During the year under consideration, the assessee received dividend income of Rs.17,92,385/- and claimed the same as exempt u/s.10(34) of the Act. No disallowance of expenses was suomoto made by the assessee in the return of income for the purpose of earning such ex...