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2019 (2) TMI 1144 - KERALA HIGH COURTRevision u/s 263 - dis-allowance of interest on borrowed funds - AO disallowed only a small portion of the interest claimed as expenditure - Commissioner sought to invoke Section 14A to disallow proportionate interest in the borrowed funds of the assessee, by an order under Section 263 - HELD THAT:- Whether there should have been an examination on facts, going by the dictum of M/s.S.A.Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] as to whether there was a commercial expediency insofar as the interest free advances made to the subsidiary company and whether Section 14A could have been applied. We find that the order under Section 263 was passed specifically based on Section 14A. As far as the applicability of Section 14A is concerned, Commissioner of Income Tax v. M/s.Essar Teleholdings Ltd.[2018 (2) TMI 115 - SUPREME COURT OF INDIA] held that the machinery provisions having come only from the assessment year 2007-08, the application of Section 14A would be prospective to that. In such circumstances, we reject the appeals and uphold the orders of the Tribunal in both the appeals.
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