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2013 (4) TMI 517 - KERALA HIGH COURTInterest-free loans to its wholly owned subsidiary - disallowances were made to the extent of the interest that would have accrued on the loans given to subsidiary companies. - Held that - it is not the case of the assessee that it had sufficient funds in its account to maintain interest-free loans to its subsidiaries. The assessee would, taking into account the total profits or rather receipts of the business of the year, contend that such receipts being more than the loans granted to the subsidiaries, it can only be assumed that the loans to the subsidiaries were from its own funds. The facts noticed by us regarding borrowings made immediately before the loans to subsidiaries were granted distinguishes the instant case on facts from the cases cited above. This fact noticed by the Assessing Officer would establish a direct nexus with the borrowings made by the assessee and loans granted by the assessee. - following the decision in decision in K.Somasundaram's case [1998 (8) TMI 59 - MADRAS High Court] decided against the assessee. Deduction u/s 80HHC - export business being a loss - restriction in section 80AB - held that:- The second issue is no more res integra in view of the binding authoritative pronouncements of the Hon'ble Supreme Court in ITO v. Induflex Products P.Ltd. [2005 (12) TMI 49 - SUPREME COURT] and A.M.Moosa v. CIT [2007 (9) TMI 24 - SUPREME COURT]. - The result of consolidated export activity of manufactured goods and trading goods are to be taken into account for claiming relief under Section 80HHC read with Section 80AB. - Decided in favor of revenue.
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