Net interest expenses to be considered for disallowance U/s. 14A

Pr. CIT Vs. Nirma Credit & Capital (P) Ltd. (Gujarat High Court)

For purpose of applying factors contained in clause (ii) of sub-rule (2) of rule 8D, prior to its amendment with effect from 2-6-2016, amount of expenditure by way of interest would be interest paid by assessee on borrowings less taxable interest earned during financial year. Therefore, only net interest expenses were to be considered for the purpose of making dis allowance under section 14A.

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