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2020 (2) TMI 825 - AT - Income TaxDisallowance of interest expenditure on the loan raised and utilized for the purpose of purchasing stock in trade - addition u/s 37 - HELD THAT:- With regard to disallowance of interest expenditure, it is not in dispute that the business operation of the assessee for construction of NH5 was not commenced and it is only in a preparatory stage. For the assessment years 2010-11, 2011-12 and 2012-13, an identical issue came before this Tribunal as found that since the business has not commenced, the assessee cannot claim the expenditure U/s.37 of the Act. Since, the facts are similar to that of the assessment years 2010-11, 2011-12 and 2012-13, this Tribunal is of the considered opinion that the claim of expenditure towards interest cannot be allowed as revenue expenditure. Therefore the order of both the authorities below is confirmed. Disallowance u/s.14A - Admittedly the assessee had not earned any exempt income in the year under consideration. The Madras High Court in the case of M/s. Redington (India) Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] found that unless there was an exempted income, there cannot be any disallowance U/s.14A of the Act. In view of the judgment of the Madras High Court in M/s. Redington (India) Ltd., this Tribunal is of the considered opinion that there cannot be any disallowance. The judgment referred by the CIT(A) is not relevant to the facts of the present case. The judgment of Madras High Court is binding on all authorities in the State of Tamil Nadu and Pondicherry including this Tribunal. Therefore this disallowance made by the Assessing Officer U/s.14A of the Act is deleted.
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