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2013 (12) TMI 595 - ITAT DELHIInterest on investment - Held that:- Following assessee's own case for A.Y. 2003-04 - Business relationship can be said to exist even with the persons from whom funds are borrowed - The principle of commercial exigency cannot be blindly applied in the case of persons with whom the assessee has some business relationship - The assessee had borrowed money for its own purpose but has been investing it in shares. Prima facie it appears to be diversion of funds for acquisition of share - If there was no condition in the very first year or in subsequent years, the amounts invested in various years in shares of Lakhani India Ltd. cannot be treated as assessee's compulsion to make investment in shares within the meaning of Commercial expediency - The issue has not been examined either by the Assessing officer or the learned CIT(A) - The issue was set aside for fresh adjudication. Expenses on exempt income - Held that:- Following assessee's own case in A.Y. 2003-04 and 2004-05 - The group concern namely Lakhani Marketing Incorporation in A.Y 2000-2001 are exactly identical to the facts of the assessee in A.Y. 2006-07 - The applicability of the facts pertaining to commercial expediency as considered in the facts of group concern needs to be seen and brought on record - No such exercise has been done by the A.O. - The issue was set aside for fresh adjudication. Tax not deducted on interest - Held that:- Following Merilyn Shipping & Transports vs. Addl. CIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] - what can be disallowed u/s 40(a)(ia) is only the outstanding balance as on 31st March of the year and cannot be invoked against payment made prior to 31st March of every year - The issue in question has become debatable in view of Special Bench judgment and contrary judgments of High Courts - The issue was set aside for fresh adjudication to verify whether the TDS has been deducted in the subsequent year and to decide the same in accordance with law keeping in view the latest legal position.
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