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2011 (6) TMI 814 - AT - Income TaxDisallowance of Proportionate Interest on Investment u/s. 36(1)(iii) - Investment made for Advancement of Business Purposes - Assessee failed to substantiate its claim that the investment was made for advancement of business purposes - CIT(A) disallowed the proportionate interest on investment made - HELD THAT:- We are in opinion that similar issue was considered in assessee’s own case of 2008, where the matter was restored back to AO to verify the nexus between the borrowed funds and investments made and thereafter decide the issue in accordance with law after giving reasonable opportunity of being heard. In view of the above, we direct the AO to examine whether the assessee had borrowed certain funds on which liability to pay tax is being incurred and on other hand, certain amounts had been advanced/invested in sister concern/others without any business purposes that is also without interest and in such circumstances, the interest to the extent the advance/investment had been made without carrying any interest cannot be allowed u/s. 36(1)(iii) - Matter Restored Back. Disallowance of Credit for TDS claimed - TDS certificates were issued in the name of JV. As TDS certificates were not standing in the name of the assessee company, CIT(A) upeld the disallowance of credit for TDS claimed - HELD THAT:- Identical issue was addressed by Tribunal in INCOME TAX OFFICER & OTHERS VERSUS LIMAK-SOMA JV., M/S. CSCHK-SOMA (JV) & M/S. SOMA-PATEL ASI (JV) [2010 (9) TMI 695 - ITAT, HYDERABAD] where it was held that unless the assessee offers the income for taxation, the TDS cannot be given credit. Respectfully following the order of the Tribunal, we set aside the issue to the file of the Assessing Officer to examine whether the assessee offered the income for taxation, and if the assessee offered the inacome for taxation for the assessment year under consideration, credit to the TDS is to be given accordingly to the assessee.
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