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2017 (12) TMI 422 - AT - Income TaxAddition u/s 14A - Held that:- As decided in assessee's own case no material has been placed on record to show that the assessee has incurred some expenditure for earning tax-free income. In our opinion, although, there is no disallowance of interest expenditure for earning tax-free dividend income, however, it cannot be said that no administrative expenditure has been incurred for earning the tax-free income of ₹ 3,60,000/- on the investment of ₹ 15,00,000/-. Since the dividend income is on account of investment in Magnum Global Fund of ₹ 15,00,000/-, therefore, considering the totality of the facts of the case, disallowance of ₹ 50,000/- on ad-hoc basis under the facts and circumstances of the case appears to be on higher side. Although, the ld. counsel for the assessee submitted that no disallowance has been made in the past, however, it was not brought to our notice as to whether the disallowance was not made in scrutiny assessment or summary assessment. Considering the totality of the facts of the case, disallowance of ₹ 25,000/- under the facts and circumstances of the case, in our opinion, will meet the ends of justice Disallowance on account of capitalization of interest - assessee company on the one hand has made decapitalization of interest income of ₹ 3066.07 lacs and on the other hand has shown such interest expenses as revenue to the extent of ₹ 9539.99 lacs - Held that:- We find identical issue had come up before the Tribunal in assessee’s own case. We also find the Tribunal has accepted the alternate contention of the assessee and allowed deduction of interest expenses incurred on earning interest income on certain deposits u/s 57(iii). Respectfully following the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case [2017 (6) TMI 591 - ITAT DELHI] we restore the issue to the file of the Assessing Officer with a direction to follow the order of the Tribunal and re-compute the disallowance. The ground raised by the Revenue is accordingly allowed for statistical purposes. Claim of deduction u/s 80IA - Form No.10CCB filed by the assessee is incomplete and proper balance sheet and profit and loss account are not available for each unit - Held that:- Since the Tribunal has already upheld the order of the ld. CIT(A) on this issue in the immediately preceding assessment year, therefore, following the same, we find no infirmity in the order of the ld. CIT(A) allowing the claim of deduction u/s 80IA of the I.T. Act. Accordingly, the order of the ld. CIT(A) is upheld and the ground raised by the Revenue is dismissed. Addition on account of bad debt written off - Held that:- It is held by various decisions including the decision of the Hon’ble Supreme Court in the case of T.R.F. Ltd. vs. CIT [2010 (2) TMI 211 - SUPREME COURT ] that it is sufficient compliance for the claim of bad debts if the debt is actually written off in the books of account of the assessee and he is not required to demonstrate or prove as to whether the debt has actually become bad debt. The Revenue cannot insist on demonstrative proof as to whether the debt has become bad debt and non-initiation of legal proceedings against the debtor would also not automatically lead to the inference that the assessee is not entitled to write off the amount of the bad debt. In view of the above, we find no infirmity in the order of the ld. CIT(A) deleting the disallowance Determination of the arm’s length price - TPA - upward adjustment - MAM selection - CUP v/s TNMM - Held that:- We find the Assessing Officer in the instant case has made upward adjustment of ₹ 27,521,494/- on the basis of order of the TPO. We find in appeal the ld. CIT(A) sustained an amount of ₹ 28,89,032/- and deleted the addition of ₹ 21,54,152/- and such reasons are already mentioned in the preceding paragraphs. Although, the ld. CIT(A) has sustained only an amount of ₹ 28,89,032/- and deleted the balance amount we find the Revenue has challenged the deletion for addition of ₹ 21,54,152/- and has not challenged for the balance addition. So far as the addition of ₹ 21,54,152/- is concerned, the assessee has demonstrated before the ld. CIT(A) that he has also entered into transaction on sale of J4 HRAP Coils with unrelated third parties on 14.03.2005 at the price of USD 1120 PMT. Therefore, the ld. CIT(A) was fully justified in upholding the action of the CUP method. So far as submissions of the ld. counsel for the assessee that price charged by the assessee from its AE is within +/-5% range we find from the submissions that the details are not coming out clearly which requires a re-visit to the file of the TPO for proper appreciation of the facts. We, therefore, in the interest of justice, deem it proper to restore the ground raised by the assessee relating to TP adjustment to the file of the TPO for fresh adjudication of the issue in the light of the submissions/details filed by the assessee in the Paper Book. The grounds by the assessee are accordingly allowed for statistical purposes.
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