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2021 (8) TMI 1206 - AT - Income TaxTDS u/s 194A - disallowance of interest paid to non-banking finance companies - Non deduction of TDS - AR submitted that the recipient of the payment has already been paid the tax and as such the same cannot be disallowed in the hands of the assessee - HELD THAT:- In view of the above order of the Tribunal [2019 (12) TMI 1537 - ITAT BANGALORE] we inclined to remit the issue to the files of the A.O. to allow the claim to the extent that the recipient of the payment paid the tax to the department. Accordingly, this issue is remitted to the files of the A.O. for verification of the issue and deciding the same in accordance with law. Disallowance u/s. 14A - AR submitted that the assessee earned dividend income which is exempt from Income-tax and the amount used for investments yielding exempt income, was made from assessee's own funds - HELD THAT:- It is the claim of the assessee that the assessee has earned dividend income which is exempt from income tax and the funds used for investment is from its own funds. However, the assessee could not demonstrate the availability of its own funds for investment in exempt income. We, therefore, remit this issue to the files of the A.O. to examine the issue afresh and also direct the assessee to prove the availability of own funds for making investment in such exempted income yielding assets. Disallowance of interest on advances made to Naveen Hotels towards purchase of land - Contention of the learned AR is that the assessee is having own funds to make investments to its sister concern - HELD THAT:- As the assessee has to prove that it is having sufficient interest free own funds to make investment to its sister concern - Case of Reliance Industries Limited [2019 (1) TMI 757 - SUPREME COURT] correctly relied - assessee has also to prove that it has not used any borrowed funds. With these observations, we remit the matter to the files of the A.O. to examine whether the assessee is having availability of interest free funds to make investment in sister concern. This ground is partly allowed.
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