9911796707
TMI Blog2012 (11) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... ght out payment - non deduction of TDS - Held that:- As decided in Merilyn Shipping consequently no disallowance is warranted - in favour of assessee. Interest free loans and advance given to related party - Held that:- Though the plea of the assessee before the authorities below was that the advances made to the said parties were not loan accounts and the assessee was having purchase/sale transactions with these concerns during the year under consideration, the CIT (Appeals) had allowed the claim of the assessee both on account of availability of funds with the assessee and also the non-consideration of the entries debited to the account of M/s Shivam Industries. Thus the issue raised by the assessee needs to be relooked by the AO by considering the plea of the assessee and in view of the ratio laid down by the Hon'ble Supreme Court in S.A. Builders Vs. CIT (2006 (12) TMI 82 - SUPREME COURT) that in case the advances between the assessee company and two concerns were on account of business transactions, no disallowance was warranted under section 36(1)(iii) - remit the issue back to the file of the AO for reconsideration - in favour of revenue by way of remand. Expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset - against assessee. Expenditure on modification of premises - Held that:- As the assessee failed to produce bills in respect of the said expenditure no merit in the claim of the assessee - against assessee. Addition invoking provisions section 36(1)(iii) - Held that:- The issue has not been considered by the authorities below in proper perspective and the addition has been made merely because the loan had been raised by the assessee company. The finding of the AO in this regard that the amount has been invested in the land account, does not come out from the documents filed by assessee. In the interest of justice the issue is to be restored back to the file of the AO to decide the same de - novo - in favour of assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... , 92, 477/- being the total amount payable from April, 2005 to March, 2006 as tabulated at page 3 of the assessment order, be not disallowed. The Assessing Officer in the said table has adopted the due date of payment as 15th of each month and the dates of payments by the assessee are also tabulated in the said chart. The assessee had paid the said amount by 20th of succeeding month in respect of employees' share to PF and ESI. However, only in respect of one payment of June, the said was paid on 21.7.2005. The Assessing Officer made disallowance of ₹ 17,92,477/- in this regard under section 2(24)(x) r.w.s.36(1)(va) of the Act. 7. The CIT (Appeals) observed that the payments which were made within the grace period i.e. upto 20th of the next month are to be allowed as a deduction restricting the addition of ₹ 1,23,327/- i.e. relatable to month of June, 2005. 8. The assessee is in appeal against the said addition of ₹ 1,23,327/- We find the Revenue is in appeal against the deletion of addition of ₹ 16,06,150/- vide ground No. 2 raised in ITA No.1118/Chd/2010. The learned A.R. for the assessee pointed out that the issue stands covered by the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit & Loss Account of Baddi unit and head office but consolidated income was submitted at the close of the year. The assessee was eligible for the claim of deduction under section 80IC of the Act in respect of Baddi unit only. The assessee had claimed deduction under section 80IC of the Act amounting to ₹ 66,49,378/-. 14. During the course of assessment proceedings the Assessing Officer in order to verify the claim of the assessee under section 80IC of the Act asked the assessee to furnish various details regarding the said deduction and also to justify the extent of profits arrived from the said unit. Queries were raised by the Assessing Officer to furnish distribution and common expenses incurred by the company from its head office at Chandigarh in order to work out actual profits of Baddi unit for computing quantum of deduction under section 80IC of the Act. The claim of the assessee before the Assessing Officer was that the purchases were centralized at the head office and stock of cloth was sent to Baddi unit by the head office. The garments manufactured at Baddi unit were then sent to the head office and were distributed to various retail outlets of the company throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he eligible unit. (vi) Assessee has admitted that expenses to the extent of ₹ 23,96,941/- (being 2.5% of ₹ 9,29,04,720/-) debited to Head office should have been allocated to Baddi unit and to that extent profits of the Baddi unit had been overstated. This also implies that assessee has admitted that to the extent of ₹ 23,96,941/ the claim of deduction u/s 80IC was excessive." 15. The Assessing Officer thereafter analyzed the Annexure A - 3 and tabulated the expenses to be considered for allocation between Baddi unit and other business of the assessee. The said list of expenses as per tables 1 and 2 are tabulated at pages 25 and 26 of the assessment order. The assessee had excluded certain expenses which were relatable to other units in entirety. The Assessing Officer rejected the explanation of the assessee observing as under: a) Various outlets of the assessee were being used for the business of entire sales of the assessee. The goods manufactured at Baddi unit were sold through various retail outlets. So the expenditure relating to the said outlets, as per the Assessing Officer, had to be taken into account for the purposes of allocation of expenses r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in allocation of repairs and maintenance expenses as per para 41. However, CIT (Appeals) confirmed the order of the Assessing Officer in refusing the claim of deduction under section 80IC of the Act. 18. The assessee is in appeal against the order of CIT (Appeals). The learned A.R. for the assessee drew our attention to the provisions of section 80IA(5) of the Act. The explanation of the assessee against reallocation of the expenses was that no such apportionment of expenses were being made because the expenses at head office and retail out sets were taken care of by transfer of reasonable profits from goods manufactured by all units including Baddi unit. The learned A.R. for the assessee further submitted that the Head office and retail outlets sells the products received from Baddi unit and other units at higher price and makes marketing profit. From this profit, the expenses of Head Office and retail outlets are being met. Even after meeting these expenses, there were surplus in the accounts of Head office and retail outlets. So the Baddi unit was already working as a separate profit center and a separate source of income and this financial methodology of the assessee was in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the assessee had agreed to apportionment of expenses upto certain level, was claimed to be totally incorrect. The assessee at no stage of proceedings agreed to any apportionment of expenses or addition on this issue. On being asked to provide the details of expenses booked on account of Head Office, the assessee provided a list thereof. The AO apportioned expenses using this information provided by assessee. The assessee provided the details of Head Office expenses in a totally different perspective. The usage of this information for apportionment could be a good ground for making addition but recording a fact that the assessee agreed to this addition during assessment proceedings was totally incorrect This objection was raised before CIT (A) also, who as per Ld. AR for the assessee had also erred in recording similar findings. The learned A.R. for the assessee stressed that the assessee did not agree to any addition at the stage of assessment proceedings. The learned A.R. for the assessee further referred to the list of expenses tabulated in table-I and 2 and pointed out as under: a) That the unit at Baddi unit was established in the second year of operation and no borr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IC of the Act in respect of Baddi unit. The assessee claimed to have drawn up the profitability statement of the Baddi unit separately and supported by the Audit Report in 10CCB, the assessee had computed quantum of deduction under section 80IC of the Act. The Assessing Officer while reworking the claim of deduction under section 80IC of the Act vide para 8.2 enlisted various points on which the assessee was found to be in-eligible for the said deduction and the same was reworked in the hands of the assessee. The first ground on which the claim of the assessee was found to be wanting was non-maintenance of separate accounts for the eligible unit and other units. We find that the CIT (Appeals) in para 39 at page 23 of the appellate order has given a finding that separate books of account have been maintained for Baddi unit. However, in view of the reasons elaborated upon by the CIT (Appeals), the said financial statement in respect of Baddi unit, as per the CIT (Appeals), could not be relied upon. The learned D.R. for the Revenue has not controverted the findings of the CIT (Appeals) in this regard. Accordingly, the conclusion of the Assessing Officer that the assessee was not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer while computing the profits of the eligible business of the assessee of Baddi unit had recomputed the said profits because of non-allocation of expenses of head office to Baddi unit. The reasons for the said reworking of the profits of the business are as under: (i) Assessee has not maintained separate accounts for the eligible unit and other units. (ii) All purchases are centralized and related expenses are debited to head office. Then stock is transferred to Baddi unit: at cost for garment manufacturing, without taking into consideration the purchase expenses e.g. purchase commission, freight etc. (iii) The manufactured goods from the Baddi unit are transferred to the head office after including profit margin and sales are then made by head office through its various retail outlets. No expenses relating to sales are taken into account for determining profits of the Baddi unit. The basis of profit margin has not been disclosed by the assessee. It is not known as to at what rate such items are finally sold in the market through retail outlets. Nothing has been brought on record by the assessee to show that the transaction between eligible unit and Head office are at ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1319750 Only expenses of head office at Chandigarh taken in (A) Rates Taxes & fees 36014370 990893 Sales tax and rent of outlets excluded in (B) Total 12,51,22,698 5,03,25,811 *Total expenses of company minus that shown for Baddi unit. 29. The claim of the assessee was that out of the total expenditure of 12.51 crores debited to the Profit & Loss Account of the head office only ₹ 5.03 crores, if necessary, should be considered for allocation to the Baddi unit. The above said chart though was prepared by the assessee but was at the instance of the Assessing Officer. The Assessing Officer, however, rejected the bifurcation proposed by the assessee and recomputed total expenditure debited to the Profit & Loss Account of head office at 12.51 crores and only excluded the amount of sales tax of ₹ 2.27 crores out of the total amount of sales tax and fee of ₹ 3.60 crores. Accordingly, the Assessing Officer considered ₹ 10.23 crores as per table-2 on account of other expenses for the purposes of allocation of expenses of head office to Baddi unit. 30. The issue raised in the present ground of appeal is whether any part of the head office expenditure was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80IC of the Act on the net profits of the said unit. In the entiret y of the above said facts and circumstances of the case where the assessee has computed the profits of its business units not on the sale price of the goods manufactured by the unit, but at a predetermined price on which the goods are transferred to its head office, without accounting for the margin of profits, which are being reflected in the hands of the head office and retail counters, which in turn accounts for the expenses of the Head Officer & Retail Outlets, there is no merit for allocation of expenses of the head office to the Baddi unit from Table 2, especially because the head office had shown profits at the close of the year. 31. In view thereof where the assessee had declared profits of the eligible business on their transfer to warehouse, on a predetermined price and computed the income, irrespective of the fact whether the goods were sold or not, the expenses as tabulated in Table-2 are not to be taken into account for apportionment of expenses of the head office to the Baddi unit. In an y case, the amounts debited to the Profit & Loss Account of the head office were total expenses of the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the assessee and their user could not be attributed to the Baddi unit. The only expenses to be considered for allocation are Directors ' salary, Directors' traveling & conveyance, legal & professional expenses and Auditors remuneration. In view of the orders of the authorities below in accepting the contention of the assessee that the turnover of Baddi unit was 2.54% of the total turnover, we direct the Assessing Officer to recompute the disallowance under section 80IC of the Act by excluding 2.54% of the total expenditure of Directors' salary, Directors' traveling & conveyance expenses, legal & professional expenses and Auditors remuneration being attributable to Baddi unit. The balance deduction u/s 80IC is allowable in the hands of assessee. The Assessing Officer shall afford reasonable opportunity of hearing to assessee. We find no merit in the orders of authorities below, that the said addition were made on agreed basis, in view of submissions of the Ld. AR for the assessee before us and written submissions filed before CIT(A). Mere providing the details at the behest of Assessing Officer does not imply to agreed addition. Ground No.4 raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 8.39 crores and also the assessee had sold commercial site for ₹ 6 crores and money was utilisied for purchase of fixed assets. The Assessing Officer observed that as the assessee had made advance payment for purchase of land but since the land was not put to use during the year under consideration, the proportionate interest was required to be capitalized. The Assessing Officer accordingly disallowed sum of ₹ 6,50,911/- under section 36(1)(iii) of the Act. 36. The CIT (Appeals) deleted the addition made by the Assessing Officer in the absence of any nexus being established between the payment made for purchase of land having direct bearing with the secured or unsecured loans obtained by the assessee. 37. The Revenue is in appeal against the order of the CIT (Appeals). The learned D.R. for the Revenue placed reliance on the order of the Assessing Officer. 38. The learned A.R. for the assessee pointed out that under the proviso to section 36(1)(iii) of the Act where the borrowed funds were utilized for the investment in the assets, and where the assets were not put to use, disallowance is to be made; but in the absence of any nexus of borrowed funds being ut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company itself out of its business activities. The Assessing Officer has failed to bring on record any evidence to justify the disallowance under the proviso to section 36(1)(iii) of the Act. The Assessing Officer has failed to refer to any borrowed funds utilized for the purposes of investment in the said fixed asset and in the absence of the same and in view of the facts of the present case where the assessee had sufficient self generated funds, we find no merit in ground No.1 raised by the Revenue and the same is dismissed. 42. The issue in ground No.2 raised by the Revenue has been adjudicated by us alongwith ground No.3 raised by the assessee in ITA No.1956/Chd/2010 in the paras hereinabove. Following the same, we dismiss ground No.2 raised by the Revenue. 43. The issue in ground No.3 raised by the Revenue is in relation to the payment of freight in and freight out. The Assessing Officer from the details furnished by the assessee noted that payment exceeding ₹ 50,000/- were paid to two persons i.e. M/s Canter Transport Operators Union of ₹ 4,38,415/- and M/s Bharat Motors Pvt. Co. of ₹ 95,048. The assessee explained that M/s Canter Transport Operators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the present case before us the assessee claimed that it has not violated provisions of section 194C of the Act because the total payments during the year to the individual truck owner was less than ₹ 50,000/-. We also find that in relation to the disallowance under section 40(a)(ia) of the Act, the Special Bench of Vishakhapatnam reported in ACIT Vs. Merilyn Shipping & Transports [140 TTJ 1(SB)(Vishakhapatnam)] has laid down the proposition that where the amount payable to the payee has been paid during the year under consideration itself and no amount is payable at the close of the year, no disallowance is warranted under section 40(a)(ia) of the Act for non- deduction of tax at source. In the facts of the present case and as admitted by both the authorized representatives, the total amount on account of freight has been paid during the year itself and nothing is payable at the close of the year; consequently no disallowance is warranted under section 40(a)(ia) of the Act. We dismiss ground No.3 raised by the Revenue. 48. Ground No.4 raised by the Revenue is against the deletion of addition of ₹ 3,39,642/- being interest relatable to the interest free loans and adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the assessee needs to be relooked by the Assessing Officer by considering the plea of the assessee and in view of the ratio laid down by the Hon'ble Supreme Court in S.A. Builders Vs. CIT (supra) that in case the advances between the assessee company and two concerns were on account of business transactions, no disallowance was warranted under section 36(1)(iii) of the Act. We remit the issue back to the file of the Assessing Officer to decide the same in accordance with law after affording reasonable opportunity of hearing to the assessee. The Assessing Officer shall also consider the plea of the assessee in respect of the entries in the respective accounts of the parties on account of purchase/sale transaction and allow credit for the same to compute the balances due between the parties. The ground of appeal No.4 raised by the Revenue is partly allowed. ITA No.693 /Chd/2011(Assessee's Appeal):(Assessment Year 2007-08) 53. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals), Chandigarh in Appeal No. 595/P/09-10 through order dated 31.03.2011 has erred in confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed against the assessee by the ratio laid down in Brook Bond India Ltd. Vs. CIT [225 ITR 798 (SC)]. In view thereof, ground No.1 raised by the assessee is dismissed. 55. The alternate plea of the assessee for considering the said expenditure under section 35D of the Act is also dismissed. 56. The issue raised by the assessee vide ground No.2 is against the application of provisions of section 14A of the Act. 57. The brief facts relating to the issue are that during the course of assessment proceedings the Assessing Officer noted from the Balance Sheet that the assessee had made investment of ₹ 8,01,50,000/- as on 31.3.2007 in shares of various companies, which comprised of the investment in shares of M/s Amartex Infrastructure Ltd. of ₹ 1,50,000/- and in SBI Mutual Fund of ₹ 8 crores. The assessee was asked to furnish the details of dividend income from SBI Mutual Fund. The explanation of the assessee was that the investment in SBI Mutual Fund was made only on 30.3.2007 and no dividend income was received during t h e ye a r . In view thereof, it was pleaded that when no dividend income has been received, the provisions of section 14A of the Act are not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 14A of the Act in view of the ratio laid down in Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [234 CTR (Bom)1]. 61. The second plea of the learned A.R. for the assessee was that there was no question of invoking provisions of section 14A of the Act as the income was offered to tax. Reliance was placed in the case of CIT Vs. Kings Exports [318 ITR 100 (P&H)] and in the case of ACIT Vs. The Punjab State Cooperative Agriculture Development Bank Ltd. (ITA No.742/Chd/2011) order dated 19.9.2011. The next plank of argument of the learned A.R. for the assessee was that the disallowance under section 14A of the Act cannot exceed the income derived from its investment i.e. ₹ 1,18,000/- as held by the Chandigarh Bench of the Tribunal in M/s Punjab State Coop. & Marketing Fed. Ltd. Vs. ACIT (ITA No.579/Chd/2011) order dated 30.9.2011. Further it was pointed out that the interest@ 12% on borrowing of ₹ 8 crores for a period of four days comes to ₹ 97, 000/- only, against which disallowance under Rule 8D has been computed at ₹ 37 lacs for two captioned assessment years. The learned A.R. for the assessee stated that no borrowed funds were utilized for the said in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be invoked where the assessee had earned exempt income from its investment. The assessee has not earned any exempt income from the said asset by holding it for a total of about four days and encashed the same during the assessment year 2008 - 09 and offered the income to tax. Following the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT Vs. Kings Exports (supra), we hold that there is no merit in invoking the provisions of section 14A of the Act in assessment year 2008-09. We are not addressing the alternate pleas raised by the learned A.R. for the assessee in this regard in view of our holding so. Ground No. 3 raised by the assessee in assessment year 2008- 09 is thus allowed. 65. Ground No. 3 raised by the assessee in assessment year 2007- 08 is against the disallowance of ₹ 1,32,02,108/- (Rs.98,96,460/- +Rs.18,49,648/ +14,56,000/-). 66. The brief facts relating to the issue are that the assessee had claimed revenue expenditure of ₹ 2,53,99,069/-, in its computation of income. The said revenue expenditure were not claimed in the books of account by the assessee company. Out of the total expenditure of ₹ 2.53 crores, sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. 68. The CIT (Appeals) upheld the order of the Assessing Officer on all the accounts totaling ₹ 1,32,02,190/-. 69. The assessee is in appeal against the order of the CIT (Appeals). The learned A.R. for the assessee pointed out that in respect of the expenditure of ₹ 1,07,49,523/-, the assessee had taken on lease plot of land for a period of 12 years from its Managing Director and had spent the aforesaid amount in the renovation of the lease hold property. In respect of electric equipment totaling ₹ 19,99,620/- the learned A.R. for the assessee pointed out that it had more than 100 retail counters and the above said expenditure was in the nature of replacement of bulbs, etc. as detailed at page 53 to 59 of the Paper Book. The learned A.R. for the assessee fairly admitted that no bills were available with the assessee for expenditure of ₹ 14,50,000/-. 70. The learned D.R. for the Revenue placed reliance on the orders of the Assessing Officer/CIT (Appeals). 71. We have heard the rival contentions and perused the record. The assessee during the year under consideration had debited revenue expenditure totaling ₹ 2.53 crores, comprising as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been claimed as revenue expenditure. The assessee has not claimed any depreciation on ₹ 10749523/- under the Income Tax Act 1961 during the year under consideration" 75. The perusal of the above said explanation fairly establishes that the assessee had spent sum of ₹ 1.07 crores on the construction of building on land taken on lease from its Managing Director. The said expenditure on the construction of the building cannot be held to be revenue expenditure in the case of the assessee. We are in conformity with the orders of the authorities below that the said expenditure incurred by the assessee is capital expenditure and the assessee is entitled to the claim of depreciation on the said assets. Reliance placed by the assessee on the ratio laid down in CIT Vs. Hi Line Pens (P) Ltd. [306 ITR 182 (Del)] is misplaced as the Hon'ble Delhi High Court had allowed the claim of the assessee on account of expenditure on repairs and renovation of rented premises, whereas in the present facts of the case before us, the assessee had incurred the said expenditure on the construction of the building itself from which it had carried on its business in the later period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and is not to be allowed as revenue expenditure, though the assessee is entitled to the claim of depreciation on the said asset. Upholding the order of the Assessing Officer in this regard we dismiss the claim of the assessee vis-à-vis expenditure of ₹ 19,99,620/-. 79. The last item of expenditure is totaling ₹ 14,56,000/- spent on modification of premises of the assessee company. The assessee failed to produce bills in respect of the said expenditure. In the absence of the same, we find no merit in the claim of the assessee and hence the same is rejected. Thus ground of appeal No.3 raised by the assessee for assessment year 2007- 08 is dismissed. 80. Ground No.4 raised by the assessee is identical to ground No.4 raised in ITA No.1056/Chd/2010 and following our reasoning given in paras hereinabove shall apply mutatis and mutandis to ground No.4 raised by the assessee and the Assessing Officer shall recomputed the deduction under section 80IC of the Act, in line with our directions. 81. Ground Nos. 5 and 6 raised by the assessee being general are dismissed as such. ITA No.687/Chd/2011 :: Revenue's Appeal :: Assessment Year 2007-08: 82. The Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ages 37 and 38 of the appellate order allowed the claim of the assessee in view of the similar plea being allowed in assessment year 2006-07. 85. The Revenue is in appeal against the said disallowance. The learned A.R. for the assessee pointed out that no disallowance is warranted as the work in progress related to its retail outlets. 86. We find that the issue in the present case is covered by the proviso to section 36(1)(iii) of the Act which clearly provides that where borrowed funds have been utilized for investment in the fixed assets for the period from the date of utilization of the funds till the date of putting the assets to use, interest relatable to such deployment of funds is to be disallowed. We find that the Assessing Officer had applied the above said provisions to work out the disallowance of ₹ 6,89,945/- as per schedule at page 81 of the assessment order. We are in conformity with the order of the Assessing Officer and reversing the order of the CIT (Appeals) we allow ground No.1 raised by the Revenue. 87. The issue in ground No.2 raised by the Revenue is against the deletion of addition of ₹ 3,58,125/-. The Assessing Officer had invoked provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y CIT(A) vide Para 4 of his order, has erred in confirming addition of ₹ 17,66,255/- made by Ld. AO wherein he had wrongly held that provisions of Rule 14A are applicable over investment in SBI Mutual Funds & Others. Further he erred in making a wrong computation of quatum of disallowance u/s 14A of the Act. 4. That on facts, circumstances and legal position of the case, the Worthy CIT(A) vide Para 5 of his order, has erred in confirming addition of ₹ 6,58,853/- made by Ld. AO wherein he had restricted the deduction u/s 80-IC of the Act by notionally apportioning the un-apportionable Head office expenses to the Baddi unit of the appellant. 5. That on facts, circumstances and legal position of the case, the Worthy CIT(A) vide Para 6 of his order, has erred in confirming addition of ₹ 8,37,466/- made by Ld. AO wherein he had wrongly held that provisions of proviso to Sec 36(1) (iii) is applicable over closing work in progress of the appellant. 6. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 91. Ground Nos. 1 and 6 raised by the assessee being general are dismissed. 92. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty was acquired from auction held on 21.1.2004 and installments were paid in assessment years 2003-04 and 2005-06. The last installment was paid during the financial year 2006-07 and the conveyance deed was executed in the financial year 2006-07. The assessee has placed on record the sanction letter of M/s India Bulls Housing Finance Ltd. at page 35 of the property under which it is stated that it is a loan against property. The amount was released in the account of Mr. Arun Gover, Managing Director, who was co-applicant on 16.3.2007 as per the document placed at pages 35 and 36 of the Paper Book. The assessee has thereafter placed on record current account of the assessee company at pages 37 onwards, under which the amount was transferred from the account of Mr. Arun Grover to the assessee company and thereafter utilized for the purpose of business. Out of the total loan received by the assessee, the last installment of ₹ 93.15 lacs was paid in financial year 2006-07 and the balance amount was utilized for running the business of the assessee. The claim of learned A.R. for the assessee is that the proviso to section 36(1)(iii) of the Act cannot be invoked in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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