Application of section 14A for disallowance of expenses

In CIT v Hero Cycles Ltd(P&H) (ITA 331 of 2009) the revenue perferred appeal against decision of the tribunal deleting disallowance of expenditure made by the AO. The court held that the tribunal had factually found that the assessee had made investments from own funds . Since the borrowed funds were not applied for making investments in tax exempt schemes, the disallowance made by the Revenue was held as unjustified. Accordingly, the appeal of the revenue was dismissed by the court.