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2013 (3) TMI 534 - AT - Income TaxDisallowance of interest - Disallowance of notional interest - Disallowance u/s 40(a)(ia) - Held that:- In our considered opinion, acquiring shares in Sameera Electronics Pvt. Ltd. by the assessee is not connected for the purpose of business. Therefore, the acquisition of shares in Sameera Electronics Pvt. Ltd. is not for the purpose of the business and the interest paid thereon is not allowable either in the section 36(1)(iii) or section 37 of the Act The issue raised by the assessee, i.e. assessee having sufficient own funds, was neither examined by the AO nor by the CIT(A). Therefore, in the interest of justice, we set aside the order of the CIT(A) and restore the issue to the file of the AO with a direction to examine the issue and decide the same after considering the decision Hon’ble Bombay High court in the case of Reliance Utilities and Power (2009 (1) TMI 4 - HIGH COURT BOMBAY ) after providing reasonable opportunity of hearing to the assessee. As per section 196 a statutory corporation, which is established under law is exempt from the TDS. In this case, in our opinion, whether the assessee has to deduct the tax in view of section 196 or not has to be examined. Therefore, neither the AO nor CIT(A) examined the issue in proper perspective. Thus, we restore issue to the AO with a direction to decide the issue afresh in the light of section 196 of the Act. Appeal of the assessee is partly allowed
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