No disallowance of interest U/s 14A if assessee’s own capital is more than investments fetching exempt income

DCIT Vs Hero Moto Corp. Ltd (ITAT Delhi) In so far as the interest aspect is concerned, it is vivid from the assessee’s balance sheet that total investments at the end of the year stand at Rs.167.74 crore. The assessee’s capital along with reserve and surpluses stand at Rs.448.33 crore. This shows that the assessee’s Shareholders’ funds is far in excess of the investment made in securities yielding exempt income. The Hon’ble Bombay High Court in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom), has held that if there are interest free funds available with the assess...