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2017 (4) TMI 1239 - ALLAHABAD HIGH COURTDisallowance of interest - Held that:- It is stated that if assessee has utilized its non-interest bearing funds for giving non- interest bearing advances then no disallowance is called for. The AO has merely gone by the fact that assessee had given interest free advances to different concerns of assessee's group. He has not commented upon the actual sources from where these advances were given. In the block assessment for the period ending on 2.7.1999, it has been clearly observed as noted above that assessee was having sufficient own funds to finance the interest free advances. These facts being not controverted no disallowance is called for. We, accordingly, confirm, the order of the Ld. CIT(A) on this issue. Accrual pf income - Foreign currency translation difference as income as per accounting principle and only on notional basis - Held that:- AO in assessment year 1993-94, had observed that this difference arose as it was in different accounts appearing in the books at the exchange rate prevailing on the first day of the accounting year were translated in Indian Rupees at the closing date. The difference was adjusted in the accounts of foreign currency translation difference. The amount of this difference was notional debit/credit and did not represent any loss or income for the purpose of computing the taxable income under the Income-Tax Act. The entries on this account were made only for balancing the books. Therefore, this exercise was merely done on account of incorporating the trial balance appearing in the Iraqi branch in the Head Officer books in Indian currency. Since no actual gain accrued to the assessee, there was no question of taxing this amount. We, accordingly, confirm the order of the ld. CIT(A) following the precedent and in view of aforementioned discussion
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