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2017 (4) TMI 808 - ITAT MUMBAIDisallowance u/s.14A - average value of investment after amalgamation - Held that:- Bombay High Court vide its order,dated 05/08/2001,had approved the scheme of amalgamation with effect from 01/04/2010, that in pursuance of the scheme three entities merged with the assessee company only on 01/04/2010 and not before that.It is a fact that NFIPL,AMMSPL and YFPL got amalgamated with the assessee from a particular date and the assessee had taken the balances of these entities for calculating the disallowance as per Rule 8D read with section 14A of the Act. In our opinion, the FAA had rightly held that investment in all the three companies would form the part of average value of investment contrary to the finding of the AO. As we do not find any legal or factual infirmity in his order,so,confirming the same,we decide the first ground of appeal against the AO. Disallowance of interest u/s.36(1) (iii) - Held that:- We find that assessee had advanced loan to AFL, that it had not charged any interest from AFL, that it had on its own disallowed ₹ 11,77,28,592/- on interest free loans given to various entities.Though in the books of accounts the assessee had written off ₹ 6.58 crores, but, in the statement of income it had not claimed the deduction. But, we find that there is need to make further verification about the position of interest free funds available with the assessee and interest free loan advanced by it.Therefore, in the interest of justice, we are restoring back he issue to the file of the AO for further verification. He is directed to afford a reasonable opportunity to the assessee. Second Ground is decided in favour of the AO, in part.
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