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2023 (1) TMI 63 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - CIT-A deleted the addition - HELD THAT:- Firstly, no satisfaction has been recorded by the Ld. Assessing Officer. Secondly, merely because expenditure was debited to profit and loss account does not entitle for disallowance u/s 14A. Thirdly, no disallowance u/s 14A of the Act should have been made if no exempt income was earned. CIT(A) held that since disallowance u/s 14A was deleted in respect of regular provisions and therefore, no adjustment was to be made u/s 115JB for computation of book profit. Respectfully following the finding of the Tribunal in the case of the assessee as well as finding of the Hon’ble Delhi High Court in the case of Era Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT] we do not find any error in the order of the Ld. CIT(A) on the issue-in-dispute and accordingly, we uphold the same. The ground No. 1 and 2 of the appeal in respect of all three appeals are dismissed. Addition of income u/s 5 of the Act under regular provisions as well as under provisions of section 115JB - advances made by assessee to its subsidiaries - assessee company being a holding company advanced certain sum to its subsidiary specifying rate of interest @ 12.5 per cent per annum - CIT(A) deleted the entire addition - HELD THAT:- As in the present case that the assessee advances to its subsidiary for business requirements, which may have impact on the objectives of the assessee for earning future revenue to the assessee. When it made in relation to advances. Though, it is another fact that the business of such nature did not materialized in positive outcome and the subsidiary had to close such business operation. The Hon'ble Supreme Court in S.A. Builders [2006 (12) TMI 82 - SUPREME COURT] held that whether expenditure may not have been incurred under any legal obligation, yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. The case of the assessee is that the assessee has made advances to its subsidiary for business expediency. Therefore, considering the decision of Hon'ble Supreme Court in SA Builder (supra), we do not find any infirmity in the order passed by Id. CIT(A) - Appeals of the Revenue are dismissed.
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