TaxTMI 
TaxTMI 
2012 (10) TMI 890
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....t the Assessing Officer observed that whether the shares are held as investments or as stock-in-trade or held for strategic purposes is a business decision taken by the assessee. Whatever be such decision, any dividend earned on such shares will be exempt by virtue of section 10. As the dividend income does not form part of the total income under the Act, the provisions of Sec.14A would come into play. Therefore, the Assessing Officer disallowed the interest of Rs. 72,83,21,913/- on the ground of borrowed funds utilized for investment in shares. The same was confirmed in appeal by the DRP. 4. Ld. Authorised Representative of the assessee filed a copy of order of the Tribunal for immediately preceding Assessment Year 2006-07 in assessee's o....
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....h is exempt from tax. We find that the Tribunal while deciding the appeal of assessee for Assessment Year 2006-07 failed to consider the decision of the Delhi Special Bench of the Tribunal in the case of Cheminvest Ltd. (supra) where it was held that even in a year where no exempt income was earned or received by the assessee, disallowance u/s. 14A can be made. Respectfully following the decision of the Delhi Special Bench of the Tribunal, we dismiss this ground of appeal of assessee. 7. The ground No.2 of the appeal of assessee relates to Hon'ble DRP erred in holding that the transaction between the assessee and its AE were not at arm's length and in upholding the adjustments of Rs. 4,72,06,208/- made to the interest income of the assesse....
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.... page-19 at para-11 as under:- "11. We have considered the rival submissions. A perusal of the order of the TPO clearly shows that the assessee had raised the funds by way of issuance of 0% optional convertible preferential shares. Thus it is noticed that the funds raised by the assessee company for giving the loan to India Telecom Holdings Ltd., Mauritius, which is its Associated Enterprises and which is the subsidiary company, is out of the funds of the assessee company. It is not borrowed funds. The assessee has given the loan to the Associated Enterprises in US dollars. The assessee is also receiving interest from the Associated Enterprises in Indian rupees. Once the transaction between the assessee and the Associated Enterprises is in....
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....payable. The assessee claimed TDS in the return of income at Rs. 7,49,23,898/-. The DRP has observed that in the submissions assessee has not given any basis for TDS claim made by it. In the earlier year also, dispute on TDS has raised and it was found by the DRP that the TDS credit was not given for defective certificates. The issue was restored t the Assessing Officer by the Hon'ble ITAT. In the present year, the assessee's claim was quite bad and unsubstantiated and therefore, the objection was not accepted. However, DRP directed the Assessing Officer to consider the claim as per law with respect to the claim of TDS. 12. Before us, the Ld. Authroised Representative of the assessee submitted that issue of credit of TDS should be restored....