Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1243 - AT - Income TaxDisallowance of the amount paid as finance charges when the assessee has provided interest free loans to its subsidiaries - Held that:- There was no specific instance noted by the Assessing Officer in respect of any direct nexus between the borrowed fund and the said advances made to the subsidiaries. The Assessing Officer had made general observations without going into the depth of the matter and without pointing out any specific instance where an interest bearing borrowing was advanced to the subsidiaries or establishing that the borrowings made by the appellant were not for business purposes. Both appellate authorities below were of the view that the assessee had explained the sources of the advances and investments made to the subsidiaries, which could not be linked to the borrowed funds and that the advances were made out of the assessee's own capital. At the relevant time the assessee was found to be having an adequate non-interest bearing fund by way of share capital and reserves. See Bharti Televenture Ltd.[2011 (1) TMI 326 - DELHI HIGH COURT]. Addition made u/s 14A of the Act r.w.r 8D - Held that:- The undisputed fact is that there is no exempt income earned by the assessee during the year under consideration. As in the case of Shivam Motors Pvt. Ltd [2014 (5) TMI 592 - ALLAHABAD HIGH COURT] have categorically held that if there is no exempt income earned by the assessee during the year, there cannot be any disallowance u/s 14A r.w.r 8D of the Rules.
|