Section 14A Interest Disallowance Deleted Due to Availability of Interest-Free Funds

Pimpalgaon Merchants Co-op. Bank Vs ACIT (ITAT Pune)

The appeal before the Income Tax Appellate Tribunal, Pune concerned disallowance made under Section 14A of the Income Tax Act, 1961, for Assessment Year 2014–15 in the case of a co-operative bank. The Assessing Officer (AO) noted that the assessee had earned exempt income from investments but had not made any suo motu disallowance. Observing that the assessee had borrowed interest-bearing funds, the AO invoked Rule 8D of the Income Tax Rules, 1962, and made a total disallowance of ₹31,33,380. This comprised interest disallowa

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