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2021 (9) TMI 138 - AT - Income TaxDisallowance u/s 14A r/w rule 8D - Addition made with reference to the income claimed as exempt - HELD THAT:- As decided in own case [2018 (12) TMI 1905 - ITAT MUMBAI] Assessee’s own funds are more than the investment as explained - We have gone through the entire facts regarding available of funds and noticed that the presumptions as held by Hon’ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] is in favour of assessee because the Revenue could not establish any nexus with the expenses claimed by assessee vis-à-vis exempt income. In the absence of the same, the presumptions in favour of assessee and hence, we delete the addition. As delete the addition on the issue of satisfaction. This issue of assessee’s appeal is allowed. TP Adjustment on account of guarantee commission u/s 92C - HELD THAT:- As decided in own case [2018 (12) TMI 1905 - ITAT MUMBAI] guarantee commission is to be charged at 0.5% as bench mark by the assessee - we are of the view that no further adjustment to determine the ALP is to be made. This issue of assessee’s appeal is allowed. TP Adjustment on Charging of interest on share application money - TPO held that since the shares are not allotted within a reasonable period, the share application money is in the nature of temporary funding till the allotment is made and proposed interest rate @ 14% and calculated the adjustment - HELD THAT:- Share application money being capital account transaction is outside the purview of section 92 of the Act and the transfer pricing adjustment cannot be made on capital account transactions as per the decision of VODAFONE INDIA SERVICES PVT. LTD.[2014 (10) TMI 278 - BOMBAY HIGH COURT] - Decided in favour of assessee. Short deduction of TDS - TDS u/s 194C or 194J - Addition u/s 40(a)(ia) - Payment relating to processing charges, photo guard coating and subtitling charges - HELD THAT:- As provisions of section 40(a)(ia) of the Act are applicable in case of non–deduction of TDS. Provisions of section 40(a)(ia) of the Act are not applicable in case of short deduction of TDS and for this proposition, in our considered opinion, the learned CIT(A) has perfectly relied upon the findings given in Vodafone India Services Pvt. Ltd. [2014 (10) TMI 278 - BOMBAY HIGH COURT]. In the present case, the assessee has deduction TDS under section 194C of the Act and deposited the same with the Government. Since the conditions of section 40(a)(ia) of the Act are fulfilled, provisions of section 40(a)(ia) of the Act in not applicable. Excess claim of expenses due to write–off - HELD THAT:- Since the income on account of withdrawal from business restructuring reserve is recorded in the current year, the corresponding expense on account of discount on commercial paper cannot be allowed in the subsequent year, as held by the Assessing Officer, and the Assessing Officer ought to have allowed the expenses in the current year itself. Consequently, we see no legal infirmity in the impugned decision of the learned CIT(A) warranting us to interference with his order at the instance of the Revenue. Nature of expenses - debenture issue expenses - Revenue or capital expenditure - AO disallowed the claim on the ground that the assessee has not debited the debenture issue expenses in the Profit & Loss Account but debited it to the securities premium account which is capital in nature and cannot be considered as revenue expenditure claimable under section 37 - HELD THAT:- CIT(A) has perfectly held that the debenture has character of loan unlike share capital and hence the debenture issue expenses are permissible deduction. The learned Departmental Representative has not brought anything on record contrary to the submission of the learned Counsel and the decision of the learned CIT(A) to enable us to take a view other than the view taken by the learned CIT(A). - Decided against revenue.
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