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2022 (1) TMI 881 - ITAT HYDERABADAddition u/s 14A - Assessee's former substantive ground that it has not derived any exempt income in the impugned assessment year so as to set section 14A r.w. Rule 8D in motion - HELD THAT:- Case Law Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT], CIT Vs. Corrtech Energy Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT] and CIT Vs. CIT Vs. Chettinad Logistics Pvt. Limited. [2017 (4) TMI 298 - MADRAS HIGH COURT] holds that the impugned disallowance is attracted only in case an assessee derives exempt income and not otherwise. We thus accept the assessee's instant former substantive grounds for this precise reason alone and make it clear that it shall be very much open for the Assessing Officer to examine the issue afresh in the year of the assessee's deriving actual exempt income in light of all the corresponding financial as per law. This first and foremost substantive ground is accepted in foregoing terms. Interest disallowance u/s36(1)(iii) - HELD THAT:- CIT(A) has rightly invoked the impugned disallowance as the assessee could not prove the impugned expenditure to have been incurred wholly and exclusively for the purpose of its own business. The assessee's case on the other hand, quoted hon'ble apex court's landmark decisions in SA Builders [2006 (12) TMI 82 - SUPREME COURT] and Hero Cycles Pvt. Ltd. [2015 (11) TMI 1314 - SUPREME COURT] that commercial expediency is not merely restricted to assessee's own business but also includes its subsidiaries' business activities as well. Be that as it may, we note that CIT(A)'s order has simply brushed aside the assessee's contentions without examining the clinching commercial expediency in the impugned interest expenditure. We therefore deem it appropriate to restore the instant latter issue back to the Assessing Officer for his afresh factual adjudication of assessee's business expediency element in the impugned advances to its sister concerns to be decided within three effective opportunities of hearing.
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