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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Satbeer Singh Godara & Shri Amarjit Singh
O R D E R Per Bench This assessee’s appeal for A.Y. 2011-12 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/NFAC/S/250/2022- 23/1050020571(1) dated 22.02.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).
Heard both the parties. Case file perused
Learned counsel for assessee does not pressed it’s substantive ground Nos. 1 & 2 with a rider that the same shall not be treated as a precedent in any other assessment year. Ordered accordingly.
Kerala Cars Pvt. Ltd. Coming to the third issue of disallowance u/s. 14A r.w. rule 8D of 3. Rs.25,23,155/- it emerges at the outset that the assessee had not derived any exempt income in the relevant previous year. That being the case we quote CIT vs. Era Infrastructure (India) Ltd., [2022] 141 taxmann.com 289 (Del.) and PCIT vs. Kohinoor Projects (P) Ltd., [2020] 121 taxmann.com 177 (Bom.) to name a few judicial precedents, to conclude that the impugned disallowance does not apply in absence of any exempt income. Deleted accordingly.
Next comes section 36(1)(iii) disallowance of Rs. 43,24,427/- made in both lower proceedings alleging diversion of assessee’s interest bearing funds for non- business purposes in advancing loans to sister concerns. Learned counsel for the assessee ‘s only case is that the assessee had advanced the impugned loans to the sister concerns out of its interest free funds and therefore, the same is not sustainable going by CIT v. Reliance Utility and Power Ltd. [2009] 313 ITR 340 (Bom.). That being the case, we deem it appropriate to accept the assessee’s instant last substantive ground in principle and leave it open for the Assessing Officer to verify it’s fund position in very terms. Ordered accordingly.
This assessee’s appeal allowed in above terms.
Order pronounced in the open court on 23rd October, 2024 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (Amarjit Singh) (Satbeer Singh Godara) Accountant Member Judicial Member Cochin, Dated: 23rd October, 2024 n.p.