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2018 (6) TMI 1523 - ITAT DELHIDisallowance of interest u/s. 36(1)(3) - interest free loan given to subsidiary - Held that:- Issue covered in assessee’s own case [2017 (5) TMI 108 - ITAT DELHI] as held so long as funds have been given to the sister concern out of interest free funds, no disallowance u/s 36(l)(iii) can be made. Thus, without their being material to controvert the finding of the Learned CIT (Appeals) that advance standing in the name of the subsidiary is out of assessee's own interest free funds, we do not find any reason to deviate from such a finding of fact. Disallowance u/s. 14A - average of investment - Held that:- Assessing Officer has considered average total investment appearing on the first day and last day of the financial year, which in our opinion is not justified. These investments may also include such investments from which no exempt income would have been earned by the assessee. As is clear from the Rule itself, the average of only such investments have to be taken into account, which yielded the income not forming part of the total income. Therefore, the AO was required to work out the average of such investment, the income from which did not form part of the total income instead of total value of investment. None of the parties before us, however, have laid any details to examine as to which of the investments have yielded such in come which did not form part of the total income. We, therefore, restore the matter back to the file of the Assessing Officer for calculating the disallowance u/s. 14A read with Rule 8D afresh
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