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2017 (8) TMI 1058 - AT - Income TaxDetermination of disallowance u/s 14A r w Rule 8D - Held that:- The decision of CIT Vs Shivam Motors judgement [2014 (5) TMI 592 - ALLAHABAD HIGH COURT] where it was held the “in the absence of any interest free income, there cannot be any disallowance as no corresponding expenditures were incurred to earn a particular tax free income” in above circumstances and in view of the above decisions that assessee has not claimed exempt income. So, no disallowance can be made. Therefore, the addition made by the AO was rightly deleted by the Ld. CIT(A) in view of the extant law on the subject, presently settled by judicial precedents from the courts. - Decided in favour of assessee. Addition u/s. 36(1)(iii) on account of interest expenses on business advance for purchase of equity shares out of borrowed funds - Held that:- As observed from the appellant's submission that the investment in M/s. Globus Industries & Services ltd was to increase its stake in that company which is in the line of manufacture and sale of edible oils, Vanaspati etc. There appears to be no finding of the fact that M/s. Globus Industries & Services ltd. and the appellant are sister concerns. Finally, even in the impugned order the business of the appellant includes trading in Vanaspati and edible oils. Accordingly, considering all these observations and arguments, the disallowance of interest u/s 36(1)(iii) made in the impugned order by working out the average rate of interest at 12% on the interest-free advance of ₹ 368.56 lacs (= ₹ 44,22,7201-) was rightly deleted by the Ld. CIT(A), which does not need any interference - Decided in favour of assessee.
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