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2018 (8) TMI 1043 - AT - Income TaxDisallowance u/s 36(l)(iii) - Interest paid on loans taken and advances given to Director - Disallowance u/s 14A r.w.r. 8D - Held that:- Consequently, amount given to director of the company has been treated as advance given for shares. Since, the main object of the assessee is to buy and sell shares, whatever advances given for acquisition of shares is in the nature of normal business advances and, therefore, whatever interest paid on such loans cannot be disallowed u/s 36(1)(iii) - once there is a direct nexus between loan and advance given for purchase of shares, then no interest can be disallowed u/s 36(1)(iii) on the ground that the assessee has diverted interest bearing funds for non business purposes. - Decided in favor of assessee. Regarding disallowance u/s 14A - Held that:- Since, we have already deleted addition made by the AO u/s 36(1)(iii), the ground taken by the assessee u/s 14A r. w. r 8D(2)(i) becomes academic in nature and it does not require any adjudication. Hence, the second ground raised by the assessee is dismissed, as infructuous. Decided partly in favor of assessee.
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