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2018 (1) TMI 398 - AT - Income TaxDisallowance u/s.14A - Held that:- During the year under consideration also assessee has not earned any exempt income, accordingly following the order of the Tribunal in assessee’s own case, we do not find any merit for the disallowance made u/s.14A. Disallowing foreign exchange loss on forward contracts treating the same as speculation loss - Held that:- As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee’s own case, we do not find any merit for the disallowance of foreign exchange loss so made by the AO treating the same as speculation loss. Disallowance of interest explained u/s.36(1)(iii) - Held that:- The assesses has incurred expenses on behalf of certain foreign subsidiaries and Indian subsidiary and shown them under the head Advances Recoverable. The assessee has not made any non business advance to the these companies, but these amount represents various debits in the nature of sale of spares, royalty receivable, service charges and the expenses incurred on their behalf such as traveling expenses, establishment expenses, financial guarantees, communications expenses, etc. The assessee does not have system of charging interest on such debits of expenses incurred on their behalf. Such advances did not attract any adjustment in Transfer Pricing order also. However, the Ld. AO considered these debit balances as advances without interest and disallowed ₹ 1,07,54,398/- out of interest u/s 36(1)(iii). We do not find any merit for the disallowance so made by the AO.
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