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2012 (8) TMI 481 - AT - Income TaxDisallownace of Interest incurred on borrowed funds - assessee invested in its fully owned subsidiary in Switzerland - show cause to assessee why the said amount should not be allowed u/s.36(1)(iii) read with section 14A - Held that:- The Dividend if any received in India from foreign company is not exempt from tax as it will not be a Dividend covered u/s.115-O which alone is exempt u/s.10(34). Further the Long Term profit on sale of shares is also not exempt since it is not covered u/s.10(38). Hence there is no application of section 14A in the present case. Except for making arguments the funds borrowed are for commercial expediency and incurred for the purpose of business of the assessee, no evidence whatsoever was produced by the assessee before the lower authorities - remit the issue of allowance of expenses back to the file of the AO to decide the matter afresh in accordance with law - in favour of assessee for statistical purposes.
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