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6. We have considered the rival submissions of the parties and have gone through the orders of authorities below. We have seen that during the relevant financial year the assessee has earned dividend income of Rs. 15.82 Crore. The AO while giving effect to the order of ld CIT(A) disallowed 5% of dividend income u/s 14A of the Act. We have perused the financial statement of assessee as on 31.03.2002. The assessee was having Capital of Rs. 319.82 Crore and Reserve & Surplus of Rs. 2145.24 Crore. Thus, the assessee has total Capital, and Reserve & Surplus fund of Rs. 2465.06 Crore. The assessee during the relevant financial year has made the investment of Rs. 1189.92 Crore. From the perusal of financial statement, we have noted that the interest free funds available with the assessee are more than the investment made during the year. The Hon'ble Bombay High Court in Reliance Utility and Power Ltd (supra) held that where ITA No.3329 to 3332/M/2011 & Ors.- M/s Tata Motors Ltd. both the interest free funds and interest bearing funds are available and the interest free funds are more than the investment made the presumption is that the investment is made out of interest free funds available with the assessee. The High Court further held that for the years for which Rule 8D is not applicable and in the event the AO is not satisfied with the working given by the assessee, the disallowance under section 14A has to be made on reasonable basis. The Hon'ble jurisdictional High Court in HDFC Bank Ltd. (supra) held that while considering disallowance under Section 36(1)(iii) the application of Section 14A of the Act would apply. Considering the fact that no interest bearing funds were utilized in earning the exempt income. Thus, no interest disallowance can be made while disallowance u/s 14A of the Act.

50. In the result the appeal filed by the revenue is dismissed.

51. Now we shall decide the appeals ITA No.(s) 3329 to 3332/M/2011 for AY 1999-2000 to 2002-03 filed by assessee. In ITA No.3329/M/2011 for AY 1999-2000 the assessee has raised following grounds of appeal; (1) Disallowance under section 14A.

The learned CIT(A) has erred in law and on facts in concluding that disallowance under section 14A is applicable without verification of the details and evidences submitted by the Appellant in support of the claim that the appellant had not incurred any expenditure in relation to exempt income. The ld. CIT(A) ought to have appreciated on the basis of the facts of the appellant that in view of the decision of the Bombay High |Court in the case of Godrej & Boyce Mfg. Co. Ltd., no disallowance can be made u/s. 14A where no expenditure had been incurred in relation to exempt income. (2) Non admission of additional grounds of appeal The ld. CIT(A) has erred both in law and on facts in not admitting the additional grounds of appeal in respect of the claim by the appellant towards the following:

The learned CIT(A) ought to have appreciated on the basis of the scheme notified by the U.P. State Government read with Circular No. 674 dated 29.12.1993 that it is allowable as deduction.

(2) The disallowance under section 14A The ld. CIT(A) has erred both in law and on facts in concluding that disallowance u/s 14A is applicable without verification of the details and evidences submitted by the Appellant in support of the claim that the appellant had not incurred any expenditure in relation to exempt income. The ld. CIT(A) ought to have appreciated on the basis of the facts of the appellant that in view of the decision of the Bombay High Court in cae of Godrej & Boyce Mfg. Co. Ltd., no disallowance can be made u/s. 14A where no expenditure had been incurred in relation to exempt income. (3) Non admission of additional grounds of appeal The ld. CIT(A) has erred both in law and on facts in not admitting the additional ground of appeal in respect of the claim by the appellant towards the following:

Government. Considering the contention of ld AR of the assessee this ground of appeal is dismissed being infructuous.

65. Ground No.2 relates to disallowance under section 14A. We have seen that similar ground of appeal was raised by assessee in ITA No. 1041/M/2011 for AY 2001-02, which we have already decided in favour of assessee in para (15) above. Thus, this ground of appeal has become infructuous and is dismissed.

66. Ground No. 3 relates to disallowance of retirement benefit payment of Rs.16,65,20,824/-. The learned and AR of the assessee submitted that the assessing officer has allowed deduction of Rs.416,30,206/-under section 35DDA of the Act in each of the 5 years beginning from assessment year 2001- 02 to 2005-06, thus this ground of appeal is infructuous. Considering the contention of ld AR of the assessee this ground of appeal is dismissed as infructuous.