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2017 (11) TMI 1419 - ITAT MUMBAIDisallowance of interest - difference of interest paid on bank loans being excessive vis-a-vis interest received on loans advanced to sister concerns - Held that:- It is the claim of the assessee that the said amount was borrowed with clear intention of acquiring shops which was leased to the lending bank itself and it is claimed that none of the borrowed funds were utilised for the purpose of advancing money to sister concerns. And second bone of contention of assessee is that its own funds and also other interest free funds available with it are more than the loan amount advanced to sister concern. The assessee has relied upon the decision of Hon’ble Bombay High Court in the case of HDFC Bank Ltd. (2016 (3) TMI 755 - BOMBAY HIGH COURT) , Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT). It is claimed by the assessee that presumption will apply that the assessee has used interest free funds available with it for advancing loans to sister concerns. It is fairly conceded and agreed by the learned counsel for the assessee that these contentions raised by the assessee need verification by the AO and matter needed to be restored to the file of the A.O for denovo adjudication of the issue on merits in accordance with law. Thus keeping in view factual matrix of the case , we are inclined to restore this issue to the file of the AO for de-novo determination of the issue on merits in accordance with law after verification and examination of all the contentions of the assessee in the light of provisions of the statute and judicial precedents. Provision towards licence fee for renewal of Excise licence fee of PLL and RS II payable to the State Excise Department - Held that:- We have observed that the provision for licence fee payable to State Government for renewal of licence was made by the assessee for the impugned assessment year while no payment has been made by the assessee to the Government till the due date of filing the return of income u/s 139(1) which has infringed Section 43B of the 1961 Act and the same cannot be allowed as an expenses for the year under consideration. Hence in view of the provisions of Section 43B these expenses claimed by the assessee towards provision for license fee cannot be allowed as no payment has been made till the due date of filing of return of income u/s 139(1) and the appellate order of the learned CIT(A) is confirmed. Hence , assessee fails on this ground Cessation of liability - licence fee payable to the State Excise Department which has been outstanding in its book of accounts as the same is not paid by the assessee to the Government - Held that:- We are in agreement that there cannot be double jeopardy and the assessee cannot be prejudiced twice once by disallowing the expenses itself in the year of incurring of the said expense and secondly by treating the same amount accumulated over a period of time by treating the same as income u/s 41(1) on account of cessation of liability . Hence , in our considered view this matter need to be restored back to the file of the A.O for denovo adjudication of the entire issue on merits in accordance with law after conducting such verification as is considered fit by the AO including status of dispute between parties
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