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2014 (1) TMI 1283 - AT - Income TaxDeletion made u/s 36(i)(iii) of the Act Disallowance on interest free loan Held that:- The contention of the assessee that it has sufficient interest-free funds and law is well settled that if the interest-free funds are available with the assessee, then disallowance in respect of the advances made to sister-concern is not justified Relying upon CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] if the interest free-fund is more than the borrowed fund, then no disallowance of interest is called for - the AO is directed to verify whether the assessee is having sufficient interest-free funds to give advances to sister-concerns Decided in favour of Revenue. Deletion made u/s 40(a)(ia) of the Act Payment made without deducting TDS at the time of making payment Held that:- The CIT(A) has decided the issue after following the decision in the case of Merilyn Shipping & Transports Versus Assistant Commissioner of Income-tax, Range-1, Visakhapatnam [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] - which has been admittedly declared as not a good law by the Hon'ble Jurisdictional High Court - assessee contended that even otherwise also no disallowance is called for as the expenditure is merely a reimbursement, therefore no provisions of tax deduction at source would be applicable - This being a new contention raised before the Tribunal - this issue requires to be redecided by the AO in the light of the contention of the assessee that the expenditure as incurred was a reimbursement, therefore tax was not to be required to be deducted matter remitted back to the AO for Fresh adjudication Decided in favour of Assessee.
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