2023 (7) TMI 678

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....are disposed of by this common order for the sake of convenience and brevity. 3. The first grievance of the revenue is that the CIT(A) erred in deleting the addition of Rs. 19111668/- made by the AO in respect of disallowance of interest u/s.14A of the Act with rule 8D of the rules. 4. The under lying facts show that on perusal of the balance sheet the AO found that the assessee has made investment of Rs. 45,70,10,646/- in the shares of M/s. Noble Tradecon Private Limited and M/s. B2B Forwarding Agent Limited. The AO noticed that the assessee has not made any disallowance u/s.14A of the Act. The assessee was asked to explain in response to which the assessee stated that it has not received any exempt income during the year, therefore,....

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.... under lying facts show that during the course of the scrutiny assessment proceedings the AO found that the assessee has total loan outstanding at Rs. 28,21,01,306/-. The AO found that the assessee has raised huge loans from various parties/ banks on which substantial amount of interest has been paid during the year. The total interest on borrowings paid by the assessee was Rs. 11,94,87,374/- . The AO further found that the assessee has given interest free loans to its subsidiary company. The AO formed a belief that the assessee has diverted its interest bearing funds towards its subsidiary company as interest free loans/ advances. Having formed this belief the AO considered 12% interest per annum and computed the disallowance of interest t....