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2019 (4) TMI 550 - AT - Income TaxDisallowance u/s. 40(a)(ia) in respect of commission expenses - non deduction of TDS u/s 195 - HELD THAT:- After considering the decision in the case of GE India Pvt. Ltd [2010 (9) TMI 7 - SUPREME COURT OF INDIA] we consider that provision of section 9(1)(i) are not applicable to the case of the assessee. Regarding applicability of section 195 we observe that once the income is not taxable, there is no liability of deduction of tax, therefore, it was not applicable for the assessee to deduct tax, therefore, there was no violation of provision of section 195. After considering the above facts, we observe that in the case of the assessee, the commission paid to non-resident agent was not liable to tax under the provisions of act when the services were rendered outside India, payments were made outside India and there was no permanent establishment or business connection in India. These undisputed facts has not been disproved by the revenue, therefore, we do not find any infirmity in the decision of the CIT(A). Accordingly, this ground of appeal of the revenue is dismissed. Disallowance u/s. 14A - HELD THAT:- It is undisputed fact that assessee has not earned and claimed any exempt income during the year under consideration, therefore, we consider that CIT(A) has rightly deleted the disallowance after following the decision of Jurisdictional High Court of Gujarat in the case of Corrtech Energy Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT]. Therefore, we do not find any merit in this ground of appeal of the revenue and the same is dismissed. Disallowance of interest u/s. 36(1)(iii) - assessee has given the working of interest capitalized after taking into consideration the capital expenditure incurred for capital asset and the quantum of work in progress from time to time - HELD THAT:- AO has disallowed the interest on all the term loans availed after August, 2010 without considering as to what part of the term loan was applied for the new asset which was already put to use. The assessing officer has not disproved the detailed working of the calculation of capitalization of interest given by the assessee. The term loan was sanctioned in the middle of the year and by that time many purchases for machineries were made by the asssessee by utilizing its own funds. We observe that the presumption of the assessing officer that the total term loan received was applied towards CWIP was not based on relevant supportive evidences. Considering the above facts and the detailed findings of the CIT(A), we do not find any merit in the ground of the appeal of the revenue. Therefore, this ground of appeal of the Revenue is dismissed. Disallowance u/s. 80IA - operation of captive power plant - HELD THAT:- Assessee is eligible to claim deduction under section 80-IA with regard to unit-6 also as a standalone power generating undertaking. See West Coast Paper Mills Pvt. Ltd. vs. CIT [2014 (7) TMI 554 - ITAT MUMBAI].
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