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2016 (5) TMI 315 - AT - Income TaxDisallowance u/s 14A - Held that:- It is apparent that the assessee company and those companies in which the assessee has invested in shares are all Government undertakings vested with inter-related and ancillary objectives to promote the activities of port. In these circumstances, the assessee company has made strategic investments in its sister companies. Therefore, there would be no expenditure incurred for monitoring the investment activity of the assessee company in its sister companies or for making such decision. Further, it is evident that the assessee is having share capital and reserves & surplus to the extent of ₹ 5,38,04,75,152/- which is much more than the investment made by the assessee company in its sister companies amounting to ₹ 43.75 crores. Hence, it is apparent that the assessee is having interest free funds in order to make such investments. In such situation, this Bench of the Tribunal on the earlier occasion had held that when investments are made by the assessee company from its interest free funds in its sister/subsidiary companies, for strategic business reasons, then the provisions of section 14A will not be applicable. - Decided in favour of assessee MAT applicability - Held that:- While computing the tax under the provisions of section 115JB of the Act which is a provision with fiction, any disallowance made by virtue of another provision with fiction viz., section 14A of the Act, cannot be added to the book profit because a provision with fiction cannot be superimposed on another provision with fiction.
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