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2018 (4) TMI 44 - ITAT AGRAAddition u/s 36(1)(iii) - assessee has advanced the money for the purpose of its business as a measure of commercial expediency - Held that:- Relying on the decision of hon’ble Supreme Court in the case of SA Builders Ltd. vs CIT(A) (2006 (12) TMI 82 - SUPREME COURT) holding that the assessee has advanced money for the purpose of its business as a measure of commercial expediency. The assessee has advanced the money for the purpose of its business as a measure of commercial expediency and accordingly, the addition made by the AO in A.Y.2006-07 u/s 36(1)(iii) of the Act has been deleted. Thus, the finding of the CIT(A) in deleting the addition made by the A.O u/s 36(1)(iii) of ₹ 31,00,953/-, holding that the same cannot be sustained on the facts of the case is justified. Disallowance u/s 14A r.w.r. 8D - Held that:- We find that the assessee company has invested ₹ 56.12 lacs in the shares of other companies, which are, very old; that the Paid-up capital & Free reserves of the assessee company at the end of the financial year were ₹ 17.53 crore and that the assessee claimed that no expenditure was incurred for earning the dividend. However, the AO has disallowed deemed interest expenditure of ₹ 6.10,968/- U/s 14A u/r 8D ignoring the fact about sufficient availability of own funds with the company for the purpose of investment in the shares. CIT(A) noted that AO has wrongly calculated addition u/s 14A, as total assets of the company as on 31.03.2008 were ₹ 56,17,79,311/- as against ₹ 3,66,92,065/- as considered in the assessment order which resulted in to wrong calculation of addition on this count. Accordingly, the ld. CIT(A) reduced the addition to ₹ 29,560/- as against ₹ 6,10,968/- made by the AO.The ld. DR. has not disputed the said calculation.
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