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2024 (1) TMI 481 - ITAT MUMBAIDisallowance of interest claim u/s 36(1)(iii) - assessee had debited the interest on loans taken and not charged any interest on loans given and the assessee could not substantiate that the interest free loans/advances given were out of non interest bearing funds - CIT(A) deleted addition as assessee had more funds than that advanced without charging any interest - HELD THAT:- In view of the facts decision of the Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] in this order that if there are funds available both interest free and over draft and/or loan taken then a presumption would arise that investment would be out of the interest free fund generated or available with the company, if the interest free funds were sufficient to meet the investments. The ITAT, Mumbai in the case of the assessee itself for A.Y. 2014-15 [2023 (9) TMI 1212 - ITAT MUMBAI] after following the decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] held that such disallowance is not sustainable when the interest free advances given by the assessee to its suppliers were for less than interest free fund available with the assessee. No merit in this grounds of appeal, therefore, this ground of appeal of the revenue is dismissed. Disallowance of Lease rental in respect of the unexpired period of lease - HELD THAT:- During the course of appellate proceedings before us as discussed above, the assessee has filed additional evidences comprising copies of lease agreements and copies of security deposits ledger from the books of the assessee. After considering the submission of the assessee that relevant documents as referred above were not easily available because of cyber attack which affected the relevant record maintained on the computer system, we admit the additional evidences filed by the assessee vide its submission dated 28.09.2022 to decide the issue on merit. In view of the additional evidences filed by the assessee, we observe that this issue is required to be decided denovo after examination and verification of the additional evidences filed by the assessee, therefore, we restore this issue to the file of the AO for deciding fresh after examination of the documents filed by assessee as referred supra in this order Therefore, ground no. 1 to 4 of the assessee are allowed for statistical purpose. Nature of expenses - Software expenses - assessee has claimed that the software expenses incurred during the year under consideration were in respect of annual maintenance cost and licensing fees - HELD THAT:- As perused the decision of ITAT in the case of assessee for A.Y. 2014-15 [2023 (9) TMI 1212 - ITAT MUMBAI] wherein the similar issue on identical fact has been decided in the favour of the assessee holding that expenses incurred as annual license fees and annual maintence of software were of revenue in nature. Following the decision of the ITAT, we direct the AO to treat software expenses as revenue expenses. Therefore this ground of appeal is allowed. Dividend distribution tax [DDT] Paid to Dutch Shareholders - MFN clause Applicability - assessee submitted that since there is MFN clause in the protocol of India Netherlands tax treaty therefore beneficial rate of 5% be considered in the case of the assessee as per Article 10(2) of India- Slovenia Treaty - HELD THAT:- We find that the Hon’ble Supreme Court in the case of ACIT (International Taxation) Vs M/s Nestle [2023 (10) TMI 981 - SUPREME COURT] Supreme Court held that the specific notification u/s 90/1 is necessary for effecting benefit under MFN clause.
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