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2014 (11) TMI 1266 - ITAT MUMBAIClaim for deduction u/s 80IA(4) - HELD THAT:- The Tribunal vide its order [2014 (7) TMI 424 - ITAT MUMBAI] after following the decision of Hon’ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. [2010 (2) TMI 108 - BOMBAY HIGH COURT] held that the assessee was entitled for claim of deduction u/s 80IA(4) of the Act. Disallowance u/s 14A - HELD THAT:- Hon’ble jurisdictional High Court in the case of CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] held that if there are funds available, both interest free and overdraft/loans taken, then presumption would arise that investments 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. Recently, the Hon’ble Bombay High Court again followed the same principle in the case of HDFC [2014 (8) TMI 119 - BOMBAY HIGH COURT] Applying the proposition of law laid down in the judicial pronouncements, we found that in the instant case case profit was much more than the investment in the joint venture company therefore the disallowance made by the A. O. by invoking the provisions of section 14A of the Act was not justified. Accordingly the A. O. directed to delete the same. Addition u/s 36(1)(iii) - HELD THAT:- We found that the cash profit of the assessee company that have been earned during the year as reduced by the amount of investment in joint venture company, was in excess to the monies advanced to Chafal as on the cut-off date, therefore it can be safely presumed that advance have been given against profits of the year and not out of interest bearing funds. This view has been supported by the decision of Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]. Fact that no further advance was given during the year and no disallowance was made in the preceding year also supports the case of the assessee. Accordingly we do not find any merit in the action of the A. O. in disallowing the interest u/s 36(1)(iii) of the Act. Appeal of the assessee is allowed
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