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TMI Blog2019 (8) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ing disposed of by this common order for the sake of convenience and brevity. 2. The first grievance relates to validity of the assessment framed u/s 153A r.w.s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. Second grievance relates to disallowance of interest u/s 36(1)(iii) of the Act, though the quantum may differ in both these appeals. 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were carefully perused. 4. As per the noting in the assessment order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of claim of finance charges of Rs. 55,28,266/-. 7. In its reply, the assessee relied upon its submissions for A.Y 2010-11 and further stated that there has been net decrease in investment by Rs. 2.91 cores. It was pointed out that the assessee has liquidated investment of Rs. 3.43 crores whereas the new investment was only Rs. 51.49 lakhs. 8. The Assessing Officer was not satisfied with the reply of the assessee and once again asked the assessee to explain why the substantial portion of the loan has been utilised for use other than business and as such to explain the allowability of finance cost u/s 36(1)(iii) of the Act. 9. In its reply, the assessee once again explained that the increase in the long term loans and advances was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove discussion even if, it is presumed that all the expenses relatable to business has been met out from the interest bearing fund only*_yet interest to the extent of 25.10% can only be termed as related to business which comes to Rs. 13,16,648/- (25.10 % of Finance Cost Rs. 55,28,266/- less interest on car loan Rs. 2,82,654/-). Thus, total allowable interest comes to Rs. 15,99,302/- (Rs. 13,16,648/- plus interest on car loan Rs. 2,82,654/-) against total claim of Rs. 55,28,266/- and balance claim of finance cost of Rs. 39,28,964/- is disallowed and added to the total income of the assessee treating the same as not related to business." 11. The assessee carried the matter before the CIT(A) but without any success. 12. Before us, the ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neering Pvt Ltd, MDL Marine Holdings Pte Ltd [Singapore] and Quippo Prakash Marine Holdings Pte Ltd [Singapore]. 16. A perusal of the aforementioned chart shows that non-current investments, which were a appearing in A.Y 2014-15 at Rs. 9.53 crores came down to Rs. 6.62 crores in A.Y 2015-16 and Rs. 3.91 crores in A.Y 2016-17. This, in addition to interest free funds available with the assessee in the form of share capital and reserves and surplus is sufficient for making interest free funds in subsidiary companies. In our considered opinion, looking after the business exigencies of the subsidiary companies is also a primary responsibility of the holding company. 17. The Hon'ble Supreme Court in the case of Hero Cycles [supra] has held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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