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2017 (5) TMI 1751 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - investment was made in subsidiary company of the assessee-company - HELD THAT:- When the investment was made by the assessee-company in its subsidiary company for the purpose of business, this Tribunal is of the considered opinion that such investment was only for commercial expediency and it has to be construed as strategic investment - investment made by the assessee was for business purpose. As rightly observed by the CIT(Appeals), the strategic investment made in the subsidiary company cannot be considered for disallowance u/s 14A - This Tribunal is of the considered opinion that the CIT(Appeals) has rightly deleted the disallowance made by the AO u/s 14A - assessee ha not earn any income from the investment. Therefore, in view of this the judgment of Madras High Court in Redington (India) Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] there cannot be any disallowance at all. Bogus purchases - AO disallowed the claim of the assessee only on the ground that the TIN registration was cancelled by State Commercial Tax Department on 22.02.2013 - HELD THAT:- AO has not made any independent verification with regard to existence of R.N. Enterprise and Nakoda Agency. It is also not the case of the Revenue that the assessee has no stock as claimed. When the existence of stock or availability of pen, pencil, gift boxes is not in dispute, it shows that the assessee has purchased the same. Merely because R.N. Enterprise and Nakoda Agency engaged itself in the business of sale of pen, pencil and gift items, after the cancellation of TIN registration by the Commercial Tax Department, that cannot be a reason to doubt the purchases made by the assessee. State Commercial Tax Department may proceed further against R.N. Enterprise and Nakoda Agency for doing business even after cancellation of TIN registration - When the availability of purchased items is not in dispute, this Tribunal is of the considered opinion that merely because TINs of R.N. Enterprise and Nakoda Agency were cancelled and postal authorities returned the letter sent by State Commercial Tax Department, the Assessing Officer is not justified in disallowing the claim of the assessee without independent verification. - Decided in favour of assessee.
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