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2019 (1) TMI 208 - AT - Income TaxDisallowance of interest u/s 244A - maintainability of appeal - Held that:- As the issue has already been adjudicated by the co-ordinate Bench in the case of Sandvik Asia Limited [2015 (11) TMI 752 - ITAT PUNE] and held that non granting of interest under section 244A of the Act is appealable. Hence, we direct the AO to compute the interest applicable to assessee under section 244A of the Act as per the Provisions of the Act. We direct the AO accordingly. Disallowance of interest expenditure on advances - advances were made in contravention of RBI directions - Held that:- As decided in assessee's own case nothing has been brought on record to indicate that the assessee has incurred an expenditure of ₹ 57.79 crores in contravention of RBI guidelines which comes within the ambit of Proviso to section 37(1) - AO has not brought any materials against the assessee to prove that the RBI has passed any orders imposing fine or penalty - the assessee has filed enough evidence before the AO to prove that the guidelines issued by the RBI is only advisory in nature and any contravention of such guidelines can be cured by making an application before RBI for condonation of such violations using its powers. Therefore, we are of the considered view that disallowing notional interest on borrowings for the simple reason that the assessee has violated directives issued by RBI without any contrary materials to prove that the assessee has incurred such expenditure for contravention of the provisions of the Act is incorrect. - decided in favour of assessee Disallowance of club fee - assessee had failed to prove the nexus of these expenses to the business - Held that:- As the issue is squarely covered in favour of assessee in assessee’s own case for the AY 1996-97 respectfully following the same, we confirmed the order of CIT(A) deleting the addition. Disallowance u/s 14A - Held that:- As assessee has its own funds available in the shape of share capital plus reserves at ₹ 35897.69 lakhs as against the investment in equity shares at ₹ 3501.05 lakhs, which is much below the own funds. Once this is the position, respectfully following the Hon’ble Bombay High court decision in the case of HDFC Bank Ltd.[2014 (8) TMI 119 - BOMBAY HIGH COURT], we delete the addition made by AO of interest expenses but sustained the disallowance at the rate of 2% of dividend income estimated by AO at ₹ 2,90,440/-. We allow this issue of assessee’s appeal partly.
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