2023 (4) TMI 374

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.... whether the Ld CIT(A) has erred in not appreciating the fact that there was no commercial expediency due to which the assessee had granted interest free loans to its subsidiaries and bore the burden of interest for their sake. 2. Whether on the facts and in the circumstances of the case and in law, whether the Ld CIT(A) has erred in deleting the addition of rs.10,20,24,116/- made u/s 14A of the IT Act, 1961 without appreciating the facts mentioned by the AO for disallowing such amount on the account of expenditure incurred in relation to income not includible in total income. 3. The appellant craves leave to modify, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 3. Aprop....

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....r AYs 2012-13, 2013-14 and 2014-15. The ld. Counsel for the assessee lastly submitted that the assessee owned interest free funds of Rs.116.63 crore which was more than the amount advanced by the assessee, i.e., Rs.4.64 crore to its subsidiaries, therefore, even on merits no disallowance is called for. 5. On careful consideration of the rival submissions, first of all, I note that the ld.CIT(A) has granted relief to the assessee with the following observations and findings:- "6.3 During the year, the appellant has given interest free advance to its two subsidiary companies- Blue Coast Hospitality Ltd and Gold Joy hotel Pvt Ltd. These are 100% subsidiary of the appellant and are in the same line of business. It has been claimed t....

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....allowed by following the judgement of the Hon'ble Supreme Court in the case of SA builders vs CIT (supra) and Hero Cycles vs CIT (supra). It is also pertinent to note that the ld.CIT-DR has not controverted a very important fact that the assessee has incurred expenditure on interest amounting to Rs.17.92 crores as per pages 18 and 30 of the assessee's paper book. Further, from page 2 of the assessee's paper book i.e., computation of income, it is clearly discernible that the assessee has made disallowance u/s 43B of the Act amounting to Rs.18,33,54,268/- which includes the said interest amount of Rs.17.92 crores. This fact also get support from the entry made by the assessee in Form No.3CD available at pages 32-42 of the assessee's paper bo....