Case Law Details
Nashik Road Deolali Vyapari Sahakari Bank Ltd. Vs ACIT (ITAT Pune)
The assessee earned exempt income of Rs.13,71,442/- from investments in mutual funds. According to AO, the assessee has incurred interest expenditure and claimed no expenditure attributable to exempt income. The AO proceeded to compute the disallowance under Rule 8D(2) and accordingly made disallowance to an extent of Rs.20,15,540/- particularly under Rule 8D(2)(ii) and Rule 8D(2)(iii) of the Rules.
The CIT(A) restricted the disallowance to the extent of exempt income.
The contention of ld. AR is that the assessee has reserve exceeding the investment and drew our attention to the Balance sheet at Page No. 6 of the paper book. On perusal of Balance sheet prepare as on 31-03-2011 we note that the assessee has capital funds i.e. share capital, reserve fund, and building fund to an extent of Rs.18,74,97,548/- and the investments made in mutual funds to an extent of Rs.9,00,00,000/- which is evident from the asset side in the Balance sheet.
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