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TMI Blog2024 (2) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... advances given to the sister concern - CIT(A) as explained that the transactions mentioned in the chart are self explanatory and are business transactions entered into in normal course of business and are certainly not loans and advances - HELD THAT:- On the contrary, on proper appreciation of facts, we find that the outstanding balances are outcome of business transactions and certainly not loans and advances and further, the AO has erred in imputing an imaginary income which neither accrued nor arose to the assessee. We, therefore, decline to interfere. Ground stands dismissed. Disallowance u/s 14A - CIT(A) deleted addition - HELD THAT:- The undisputed fact is that the assessee has not claimed any exempt income. Therefore, provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature and needs no separate adjudication. 4. Ground No. 2 relates to the deletion of addition of Rs. 1,24,12,036/- on account of disallowance of claim of deduction u/s 35AC of the Income-tax Act, 1961 [the Act, for short]. 5. While scrutinizing the return of income, the Assessing Officer noticed that the assessee has claimed deduction u/s 35AC of the Act amounting to Rs. 1,24,12,036/-. The Assessing Officer observed that the assessee has not brought on record details/necessary evidences for being eligible to claim such deduction. Therefore, the assessee was show caused to justify its claim of deduction. 6. The assessee filed detailed reply explaining the claim. But the reply of the assessee was simply dismissed by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Closing Balance Interest Charge Sahara India Commercial Corp. Ltd. Rs. 13,84,89,156/- NIL NIL Sahara India Rs. 17,86,78,438/- Rs. 9,15,34,8121- NIL The Assessing Officer observed that the assessee has not shown interest income on the aforementioned loans and advances. 14. A show cause notice was issued to the assessee asking it to explain as to why interest @ 12% may not be imputed on the average of opening and closing loans outstanding against the aforementioned related parties. 15. The assessee filed detailed reply which did not find any favour wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Ground No. 3 stands dismissed. 20. Ground No. 4 relates to the deletion of addition of Rs. 6,13,17,433/- on account of addition/disallowance u/s 14A of the Act. 21. While scrutinizing the return of income, the Assessing Officer noticed that there was huge investment under the head Non-current investment . Invoking the provisions of section 14A of the Act r.w.r. 8D of the ITAT Rules, the Assessing Officer computed disallowance at Rs. 6,13,17,433/-. 22. Before the ld. CIT(A), it was explained that the assessee was carrying on business of residuary non-banking company registered with RBI and in pursuance of RBI guidelines, Directed Investments are required to be made which are business investments . Whatever income is accruing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis for making this addition is that Sahara India Commercial Corporation Ltd. has shown to have paid interest of Rs. 17,36,68,046/- whereas the assessee has shown interest of Rs. 14,63,91,339/-. It was explained before the Assessing Officer that Sahara India Commercial Corporation Ltd. has shown an amount of Rs. 2.73 crores as prior period expenses and rest Rs. 14.63 crores pertains to the relevant F.Y which has been shown by the assessee as income. 30. This plea was rejected by the Assessing Officer who proceeded to make the impugned addition. 31. Before the ld. CIT(A), the assessee reiterated its claim. 32. After verifying the facts from the ledger account and after being satisfied with the entries/narrations, the ld. CIT(A) d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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