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15-01-2020, ATS Infrastructure, Section 36(1)(iii), 14A, Tribunal Delhi

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8 months 1 week ago #12057 by amit
Section - 36(1)(iii), 14A, 8D
Order Date - 15-01-2020
Favouring - Assessee
Court - Tribunal Delhi
Appellant - ATS Infrastructure Ltd.
Respondent - ACIT
Justice - BHAVNESH SAINI JM & N.K. BILLAIYA AM
Citation - 120Taxpundit122
Appeal No. - ITA.No.5408 & 5601/Del./2018
Asstt. Year - 2012-2013, 2013-2014 & 2014-2015

Order

PER : BHAVNESH SAINI, J.M.

All the appeals by the Assessee are directed against the different Orders of the Ld. CIT(A)-4, Kanpur, Dated 31.03.2017, for the A.Y. 2012-2013 and 25.07.2018 for the A.Ys. 2013-2014 and 2014-2015.

2. We have heard the Learned Representatives of both the parties and perused the material on record. Since issues are common , therefore, all the appeals were heard together and we dispose of the same by this consolidated order. The appeals are decided year-wise as under :

A.Y. 2012-2013 :

3. On Ground Nos. 1 and 2, assessee challenged the disallowance of Rs.1,51,65,269/- made on account of interest under section 36(1)(iii) of the I.T. Act, 1961. The A.O. noted that assessee-company has given interest free loans and advances to related party. The disallowance of interest expenses against these loans have been discussed in the assessment order passed for preceding A.Y. 2011- 2012. In the same manner, interest on loans/advances given to M/s. Prateek Resorts & Builders Pvt. Ltd., has been disallowed. The A.O, therefore, disallowed Rs.1,51,65,269/- under section 36(1)(iii) of the I.T. Act, 1961. The assessee made detailed written submissions before the Ld. CIT(A). However, the Ld. CIT(A) dismissed the appeal of assessee.

3.1. Learned Counsel for the Assessee submitted that addition has been made by the A.O. simply by relying on the Order passed in preceding A.Y. 2011-2012 in the case of the assessee. However, the said addition has been deleted by the Ld. CIT(A) and Department did not move any appeal against the said decision. Copy of the grounds of appeal for the A.Y. 2011-2012 is filed on record in support of this contention. The Order of the Ld. CIT(A) for the A.Y. 2011- 2012 is filed at Pages 186 and 187 of the paper book. In addition to the above submissions, the Learned Counsel for the Assessee further submitted that detailed break-up of advances given to M/s. Prateek Resorts & Builders Pvt. Ltd., relating to assessment year under appeal as on 31.03.2012 was Rs.12,13,22,153/-. The opening balance as on 01.04 2011 was Rs.5,70,72,153/- relevant to A.Y. 2011- 2012 which have been decided in favour of the assessee. Learned Counsel for the Assessee further submitted that advances were given for business purposes. The evidence for the same are filed at Pages 94, 95 and 98 of PB which is correspondence between the parties. He has, therefore, submitted that since the amount in question have been given for commercial expediency, therefore, no addition could be made. He has relied upon Judgment of Hon’ble Supreme Court in the case of S.A. Builders 288 ITR 1 (SC). Learned Counsel for the Assessee further submitted that during the year under consideration, the assessee-company has sufficient own funds as well as interest free borrowing funds which have been used to make these advances and these advances have been shown in the balance-sheet, copy of which is filed at page-10 of the PB to show that assessee has total own surplus funds of Rs.35,57,47,999/-. It was, therefore, submitted that no disallowance of interest should be made out of the same. He has relied upon Judgment of Hon’ble Supreme Court in the case of Commissioner of Income Tax vs., Reliance Industries Ltd., 410 ITR 466 (SC) in which the Hon’ble Supreme Court has noted findings of Tribunal that “the findings of the Tribunal that interest free funds available to the assessee were sufficient to him for its investment. Hence, it can be presumed that investments were made from the interest free funds available with the assessee”.

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