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2014 (2) TMI 1331 - AT - Income TaxDisallowance on account of notional interest on these loans - Held that:- From the order of AO and Ld. CIT(A) we have found that it was the contention of assessee that it did not incur interest expenditure for the purpose of making investment out of which the assessee has earned tax free income. Such contention has not been examined by either of them. Therefore, to the extent it relates to disallowance of interest we consider it just and proper to restore this issue to the file of AO with direction to re-examine the disallowance to that extent. So far as it relates to another component which relates to other expenses, we uphold the same. Accordingly, Ground No.2 is partly allowed for statistical purposes. Addition u/s 36(1)(iii) - interest paid for expansion of existing business has to be to be disallowed - Held that:- Since we are restoring other issues to the file of AO, therefore, in the interest of justice this issue is also restored back to the file of AO for re-adjudication with a direction to give appropriate opportunity to the assessee to bring all facts on records. After bringing all facts on record, this issue will be re-adjudicated by the AO as per law. This ground is treated to be allowed for statistical purposes.
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