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of <h1>Tribunal overturns Revenue's orders on interest disallowance & loans, remands for fresh assessment.</h1> <h3>M/s. Essar Investments Limited Versus Deputy Commissioner of Income Tax, Range 5 (1), Mumbai and vice-versa</h3> M/s. Essar Investments Limited Versus Deputy Commissioner of Income Tax, Range 5 (1), Mumbai and vice-versa - TMI Issues involved: Cross appeals by the assessee and Revenue against the order dated 6.5.2005 passed by the Ld. CIT (A) for the assessment year 2002-2003.Issue 1 - Disallowance of interest related to u/s 14A:- The assessee had invested borrowed funds in shares, resulting in disallowance of interest.- Ld. CIT (A) directed AO to calculate disallowance based on previous order.- Tribunal set aside the matter for fresh adjudication based on recent decisions and High Court rulings.- Grounds 1, 2, and 3 in assessee's appeal and Ground No. 1 in Revenue's appeal addressed this issue.Issue 2 - Disallowance of interest on interest-free loans:- AO disallowed interest on interest-free loans given to group companies.- Ld. CIT (A) directed AO to disallow interest as per previous calculation.- Tribunal held that interest-free loans were for business purposes and deleted the disallowance.- Ground No. 4 in assessee's appeal and Ground No. 2 in Revenue's appeal focused on this issue.The Tribunal, after considering submissions and legal precedents, set aside the orders passed by Revenue authorities on both issues. The matters were sent back to the AO for fresh adjudication in light of recent decisions and High Court rulings. The appeals were partly allowed for statistical purposes, with the disallowances of interest related to u/s 14A and interest on interest-free loans being deleted based on the Tribunal's findings.
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