ITAT upheld sec. 14A disallowance as loan funds were used for investment earning tax free income

May 7, 2014[2014] 44 taxmann.com 340 (Mumbai - Trib.)

IT: Where assessee had also used loan funds for making investments that earned tax free dividend, part of interest expenditure was to be disallowed in terms of rule 8D(2)(ii) read with section 14A

IT: Where assessee had a commercial interest and also obligation in making investment in the company, such investment could not be said to be for non-business purposes, interest on borrowed capital could not be disallowed

IT: Where tax authorities without properly appreciating facts, clarificatory letter issued by tax auditor, frequency of transactions in shares etc., held same as trading as against assessee's claim of investment, matter required re-adjudication