Proportionate disallowance u/s. 14A unwarranted for investments made in tax free bonds

Sarva Haryana Gramin Bank Vs ACIT (ITAT Delhi) ITAT Delhi held that proportionate disallowance of interest is not warranted, under Section 14A of Income Tax Act for investments made in tax free bonds or securities which yield tax free dividend and interest. Facts- AO noted that assessee has made investment in tax free bonds/debentures, mutual funds, shares etc. which yielded tax free dividend and tax-free interest and exempted long term capital gain totaling to Rs.3,87,57,264.25. That against this exempted income, the assessee has made disallowance of expenses under Section 14A of the Income T...