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2023 (4) TMI 110 - ITAT HYDERABADDisallowance of foreign exchange fluctuation loss - HELD THAT:- The loss on foreign exchange fluctuation loss has to be added to the cost of the asset and depreciation has to be allowed on this but such foreign exchange fluctuation loss cannot be allowed as a revenue expenditure. The ground raised by the assessee is accordingly decided in the above terms. Addition of notional interest being interest free advance given to different persons - Disallowance of interest expenditure - addition being the interest @ 12% on advances given to various persons on the ground that interest bearing funds have been diverted for non-business purposes - HELD THAT:- Since the advance paid to Vijayawada Project is continuing in this year also and since the issue has already been decided by the Tribunal and the AO in the consequential order has allowed the same, therefore, no disallowance of interest on this amount issue is called for. Accordingly AO is directed to delete the disallowance of interest. So far as the balance amount we find an amount arises from the running account maintained with the holding company and the assessee company wherein funds were transferred as per the business requirement - no notional interest on such recurring transactions is called for. Accordingly, we direct the AO not to charge any notional interest. Rent deposit given to Kamineni Estates (P) Ltd., for the purpose of leasing a space to operate a Wellness Centre - No addition of notional interest on account of rental advance for lease of property in our opinion can be made since the same is for business purposes. Similarly, the disallowances of notional interest on the advances given to professionals who are doctors in our opinion cannot be made - we are of the considered opinion that the CIT (A) is not justified in sustaining the addition of proportionate notional interest on the advances to professionals made by the AO - The various other advances do not call for disallowance of notional interest. Accordingly, the same is directed to be deleted. The second issue raised by the assessee is accordingly allowed.
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