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2012 (7) TMI 931 - ITAT MUMBAIDisallowance of interest - Held that:- In view of the fact that the interest free funds advanced by the assessee to its subsidiary company are much less than the interest free funds available with it in the shape of Share capital along with Reserve and surplus, in our considered opinion there can be no question of sustaining any addition in this regard. We, therefore, uphold the impugned order but from a different angle. This ground is not allowed. Disallowance made u/s 14A to 5% of exempt income - Held that:- CIT (A) overlooked the factual scenario prevailing in the present case in applying the ratio of the Tribunal order in the case of M/s. VIP Industries [2010 (9) TMI 1097 - ITAT MUMBAI ], which restricted disallowance to 5% of exempt income only towards administrative expenses and not interest. In such a situation, we are not inclined to uphold the impugned order on this issue. The conclusion drawn by the Ld. CIT (A) on this issue is set aside and matter is restored to his file for taking a fresh decision on computation of disallowance u/s 14A as per law after allowing a reasonable opportunity of being heard to the assessee.
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