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2023 (7) TMI 678 - ITAT DELHIDisallowance of interest u/s.14A r.w.r. 8D - assessee stated that it has not received any exempt income during the year, therefore, no disallowance need to be made - HELD THAT:- The assessee has not earned any exempt income during the year under consideration is not disputed, therefore, the ratio laid down in the case of Era Infrastructure (India) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] squarely apply wherein the Hon’ble High Court has held that no disallowance need to be made if there is no exempt income. Decided in favour of assessee. Disallowance of interest - CIT(A) applying the percentage of 6% as against 12% applied by the AO in respect of disallowance of interest - HELD THAT:- As the interest free funds available with the assessee are far more in excess of the loan/ advance given to the subsidiary. Hon’ble Supreme Court in the case of Reliance Industries [2019 (1) TMI 757 - SUPREME COURT] has held that no disallowance of interest expense is warranted when interest free funds available are far more in excess of the interest free advance. No merit in the additions made by the AO, therefore, the AO is directed to delete the additions. Decided in favour of assessee.
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