TMI Blog2023 (4) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... being unable to see any valid reason to interfere with the findings arrived at by the ld.CIT(A), we uphold the same. Accordingly, ground No.1 of the Revenue is dismissed. Disallowance u/s 14A of the IT Act r.w.r. 8D - assessee submitted that undisputedly, no exempt income has been earned by the assessee during the year under consideration, therefore, no addition could have been made in the hands of the assessee u/s 14A of the Act r.w.r 8D as relying on Cheminvest Ltd.[ 2015 (9) TMI 238 - DELHI HIGH COURT] and Crystal Crop Protection Pvt. Ltd. [ 2022 (7) TMI 1162 - DELHI HIGH COURT] - HELD THAT:- AO has made disallowance solely relying on CBDT Circular No.05/2017 dated 11.02.2014. The Hon ble jurisdictional High Court of Delhi in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts mentioned by the AO for disallowing such amount on the account of expenditure incurred in relation to income not includible in total income. 3. The appellant craves leave to modify, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 3. Apropos ground No.1, the ld. CIT-DR, supporting the action of the AO, submitted that in the present case, interest free funds have been granted to the subsidiaries and there was no commercial expediency involved at all. The ld. CIT-DR submitted that the subsidiaries were enjoying interest free funds and the assessee was bearing the burden of interest for their sake which is against the provisions of section 36(1)(iii) of the Income-tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following observations and findings:- 6.3 During the year, the appellant has given interest free advance to its two subsidiary companies- Blue Coast Hospitality Ltd and Gold Joy hotel Pvt Ltd. These are 100% subsidiary of the appellant and are in the same line of business. It has been claimed that the advance was given for expansion of appellant s business in hospitality industry. The purpose of loan was explained as expansion of appellant s business and was clearly in the nature of business expenditure. There was commercial expediency for advancing the interest-free loan. The AO has disputed the business nexus or commercial expediency of the loan mentioning that the subsidiaries are enjoying interest-free funds while the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly discernible that the assessee has made disallowance u/s 43B of the Act amounting to Rs.18,33,54,268/- which includes the said interest amount of Rs.17.92 crores. This fact also get support from the entry made by the assessee in Form No.3CD available at pages 32-42 of the assessee s paper book. In such a situation, when the Revenue has allowed claim of the assessee during the preceding three assessment years considering the fact of commercial expediency, then, the ld.CIT(A) cannot be held as unreasonable and unjustified in following the orders of his predecessors. It is a peculiar factual position of present AY 2015-16 that the assessee, in fact, not claimed any expenditure on interest except interest on car loan of Rs.79,707/-. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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