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2022 (2) TMI 74 - AT - Income TaxDisallowance on account of interest free loans to its subsidiary companies - CIT-A delete the addition - HELD THAT:- As decided in own case [2018 (8) TMI 1136 - ITAT DELHI] findings given by the learned CIT (Appeals) that the interest free funds available with the company were sufficient to advance interest free advance could not be controverted by the learned Departmental Representative.if the interest free funds are sufficient to make the investment the presumption would arise that investment would be out of interest free funds generated or available with the company if the funds are both interest free and interest bearing funds. It is also an admitted fact that the assessee company had already advanced ₹ 21,17,41,988.5 prior to taking loan for purchase of vessels and assessee company has advanced interest free loan of ₹ 5,21,27,291/- during the year whereas it has earned profit of ₹ 38,97,52,337/- during the year - Therefore no infirmity in the order of the Ld. CIT(A) in deleting the disallowance of notional interest - Decided in favour of assessee. Depreciation claimed being 40% on Aircraft which was not in use - HELD THAT:- As decided in own case [2018 (5) TMI 1761 - ITAT DELHI] allowing depreciation on the aircraft which is ready for use, but has not earned any income during the year. The ground raised by the Revenue is accordingly dismissed - Decided in favour of assessee. Disallowance of unpaid operational charges to ONGC - HELD THAT:- As decided in own case [2018 (8) TMI 1136 - ITAT DELHI] CIT(A) in the instant case while deleting the addition has followed his order for the A.Y. 2011-12 and the Tribunal has restored the issue to the file of the A.O. for adjudication of the issue afresh. Therefore, we deem it proper to restore this issue to the file of the A.O. with a direction to adjudicate the issue in the light of direction of the Tribunal in assessee’s own case for the A.Y. 2011-12. Grounds of appeal number.5 raised by the Revenue is accordingly allowed for statistical purposes. TDS u/s 195 - Disallowance of expenses u/s 40 (a) (ia) - assessee has not deducted TDS on payment made to M/s. Noble Denton Middle East as per the provisions of Section 9(1)(vii) - CIT-A deleted the addition - HELD THAT:- We find merit in the submissions of the Learned Counsel for the Assessee that as per DTAA with UAE business profits are taxable in the country of origin i.e. UAE as services were provided by the Company registered in UAE and no independent professional has provided services. Even otherwise tax involved was much low as per section 44RR on non-resident engaged in the business of providing services or facilities to be used in exploration of mineral oil only 10% income is taxable and tax thereon would be only 4% applicable on foreign companies. However, after obtaining certificate from Revenue authorities/CA no tax was payable due to DTAA and foreign payments were made only thereafter. CIT(A) while deleting the addition has followed his order for the A.Y. 2011-12 and no appeal has been filed by the Revenue on this issue before the Tribunal although Revenue had filed an appeal against other issues where the Ld. CIT(A) had given relief to the assessee. Under these circumstances and in view of the detailed discussion made by the Ld. CIT(A) on this issue, we do not find any infirmity in his order and the same is, therefore, upheld. Grounds of appeal number.6 raised by the Revenue is dismissed. Disallowing the claim of exemption in tonnage tax system - HELD THAT:- As decided in own case [2018 (5) TMI 1761 - ITAT DELHI] we do not find any infirmity in the order of the Ld. CIT(A) in deleting the disallowance made by the A.O. by disallowing the claim of exemption under tonnage tax system. Grounds of Revenue on this issue is accordingly dismissed. Disallowance in computation of income under section 115JB - HELD THAT:- Since we have already upheld the order of the Ld. CIT(A) in deleting the disallowance made by the A.O. and since the provisions of Section 115JB of the I.T. Act, 1961 clearly provides that the profit derived by the tonnage tax company shall be excluded from the book profits of the company for the purpose of Section 115JB of the I.T. Act, 1961, therefore, we do not find any infirmity in the order of the Ld. CIT(A) in directing the A.O. to exclude the income derived from shipping activities from the computation of book profits. Accordingly, grounds of appeal raised by the Revenue on this issue is dismissed.
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