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2017 (2) TMI 1469 - AT - Income TaxDisallowance of data processing cost u/s.40(a)(i) - CIT(A) deciding the issue in favour of the assessee - HELD THAT:- Findings of CIT(A) and relying on the decision of the Tribunal in assessee’s own case, we do not find any reason to interfere in the order of CIT(A) for deleting disallowance of data processing cost. Taxability of interest paid to Head Office - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee for the year under consideration has relied on the Order passed by the Tribunal in the assessee’s own case for the Assessment Year 2003-04. Disallowance u/s.14A for earning exempt income - Contention of assessee that no expenditure has been incurred or claimed by the Indian Branch in respect of interest earned by the Head Office (which is not taxable)HELD THAT:- The issue has been decided in assessee’s favour by the Mumbai ITAT, in assessee’s own case for Assessment Years 2004-05, 2005-06, 2007-08 and 2009-10. The Indian Branch has not received / earned any interest income from its Head Office or other foreign branches and hence there can be no question of the interest expense in question being incurred to earn any exempt income and hence the same cannot be disallowed u/s.14A. The proposition that no disallowance can be made u/s.14A of the Income-tax Act,1961 in case there is no exempt income is now well settled and one can refer to the following cases wherein the said proposition has been upheld in CIT v/s. Delite Enterprises [2009 (2) TMI 498 - BOMBAY HIGH COURT]. We restore the matter back to the file of the AO to find out if assessee was in receipt of any exempt income vis-à-vis interest paid to head office. If the AO found that assessee was not in receipt of any exempt income, no disallowance is to be made. Accordingly AO is directed to decide afresh after verification.
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