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2012 (10) TMI 890 - AT - Income TaxDisallowance u/s. 14A read with Rule 8D of the Act – alleged that borrowed funds utilized for investment in shares -contention of the assessee is that in the earlier Assessment Year 2006-07 where no dividend income was received by the assessee, no disallowance of expenditure can be made u/s. 14A of the Act - Held that:- Even in a year where no exempt income was earned or received by the assessee, disallowance u/s. 14A can be made – in favor of revenue Arm's length price - assessee has entered into international transaction with its associated enterprises, India Telecom Holdings Ltd., Mauritius by way of granting a loan – Held that:- it LIBOR rate which has to be considered while determining the arm's length interest rate in respect of the transaction between the assessee and the Associate Enterprises. As it is noticed that the average of the LIBOR rate for 1.4.05 to 31.3.06 is 4.42% and the assessee has charged interest at 6% which is higher than the LIBOR rate, we are of the view that no addition on this count is liable to be made in the hands of the assessee. In the circumstances, the addition as made by the Assessing Officer on this count is deleted Disallowance of TDS credit – Held that:- DRP has observed that in the submissions assessee has not given any basis for TDS claim made by it - TDS credit was not given for defective certificates - DRP directed the Assessing Officer to consider the claim as per law with respect to the claim of TDS – matter remanded to AO
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