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2014 (1) TMI 1686 - AT - Income TaxDisallowance of interest paid by the assessee to sister concern Intersil Semiconductors Pvt. Ltd. - Held that:- It is pertinent to mention that the disallowance/addition has been made/confirmed on the ground that the assessee has borrowed funds on which interest has been paid whereas the assessee has advanced interest free loan and made investments. In this context, the perusal of the balance sheet available at page 1 of the paper book indicates that the assessee has sufficient own funds to make loans and investments. When the fact being so, the ratio laid down by the Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd (2009 (1) TMI 4 - BOMBAY HIGH COURT) is applicable in the case of the assessee to support the proposition that the assessee has made the loans and investments out of the surplus funds. Also, it is not disputed that the borrowed funds on which the interest paid to the sister concern is utilized for the purpose of business. Therefore, there need not be any doubt about the allowability of the interest expenditure claimed by the assessee u/s 36(1) (iii) of the Act. In view of that matter, the disallowance/addition made on account of interest on this count is deleted - Decided in favour of assessee. Disallowance of being 50% of the repairs & maintenance expenditure - Held that:- The AO disallowed the impugned claim of the assessee as the nature of repair in respect are not clear and the assessee has not provided any break up of expenditure despite the fact that the details have been produced before him whereas the Ld.CIT(A) confirmed the disallowance of 50% on a different reasoning that the said expenditure is capital in nature. Considering the totality of facts and after observing that similar claims of the assessee has been allowed by the Tribunal in the assessee’s own case for the assessment year 2004-05, wherein it has been held that the expenditure incurred on this account has to be allowed as normal revenue expenditure, we, following the said order, delete the addition made/confirmed by the AO/CIT(A). - Decided in favour of assessee. Disallowance of reduction/writing off of stock in trade - Held that:- It is pertinent to mention that the assessee has claimed the impugned written off in respect of the stock as the business has become obsolete and the said stocks have been destroyed. The perusal of the orders of the authorities below indicates that the said claim of the assessee has not been properly verified while making/confirming the said disallowance. Considering the facts in toto, we are of the view that it is just and proper to set aside the issue to the file of the AO to verify the claim of the assessee whether the stock has become obsolete/destroyed. On confirming the same, the AO may accordingly decide the issue in accordance with law after providing due opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purpose.
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