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2018 (4) TMI 1205 - AT - Income TaxDisallowance made u/s. 14A - Held that:- As own funds available with the assessee is in far excess of the value of investments and hence as per the decision rendered by Hon'ble Jurisdictional Bombay High Court in the case of HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT), no disallowance out of interest expenditure is called for. Thus direct the Assessing Officer to delete the disallowance under rule 8D(2)(iii) out of interest expenditure. As already noticed that the assessee itself has disallowed a sum of ₹ 50,000/- under rule 8D(2)(iii). Accordingly, we direct the Assessing Officer to sustain disallowance u/s. 14A of the Act to the extent disallowed by the assessee. Addition on the basis of ITS record - Held that:- If the difference has arisen for the reason as stated by the assessee alone, then we are of the view that there is merit in the contention of the assessee. As submitted by the assessee the difference, if any, would automatically get adjusted when concerned deposits are closed. We have already noticed that neither of the parties have brought on record the details of deposits, details of accrued interest accounted by the assessee and that was uploaded by the bank, difference between both the figures etc. Any kind of decision can be taken only if these details are examined, which requires verification at the end of the Assessing Officer. If the difference has arisen on account of accrued interest on deposits kept with the banks, we are of the view that no addition is called for. Accordingly, we restore this issue to the file of the Assessing Officer with the direction to examine these details and take decision as per discussion made. Addition being the difference between income booked by the assessee and income shown in TDS certificate - AS submitted that if income of ₹ 1,24,282/- is assessed in the hands of the assessee, corresponding TDS should be given credit - Held that:- We find merit in the alternative contention of the assessee and accordingly, we direct the Assessing Officer to give corresponding TDS credit to the assessee. Addition on TP adjustment - non-collection of interest from its AE for advances made - Held that:- No correspondence exchanged between the parties that both the parties are waiving their right to collect interest/commission in view of cross services, was shown to tax authorities or to us. In the absence of any material to support the submissions, we are unable to accept the oral submissions. In any case, as submitted by learned DR, loan transactions and the agency transaction, if any, are two different transactions. Since alleged marking efforts cannot be linked to the advance given by the assessee interest free, we are of the view that the explanation of the assessee for not charging interest to its AE is not appealing. - Decided against assessee. Disallowance of mark to market loss of forward contracts - Held that:- We notice that the assessee has also revalued the underlying asset, i.e., export receivables and credited the income in the profit and loss account. The loss arising on revaluation of forward contract, in our view, deserves to be allowed. Accordingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow the claim of the assessee. - Decided in favour of assessee.
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