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TMI Blog2013 (9) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not held to be illegal either by IT department or by any other government agency. Interest payment is allowed as a business expenditure – Decided against the revenue. - ITA No.748, 751, 752 and 753/Ahd/2008 - - - Dated:- 7-1-2011 - Shri G. D. Agarwal And Bhavnesh Saini,JJ. For the Petitioner : Shri Alok Johri For the Respondent : Shri P. M. Mehta ORDER Per G. D. Agarwal, Vice-President :- These are four appeals by the Revenue against the orders of the CIT(A)-II, Ahmedabad arising out of the order of the Assessing Officer passed under Section 143(3) r.w.s. 153C of the I.T. Act, 1961. 2. The only ground raised in all these appeals by the Revenue is against deletion of disallowance of interest. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne place to another place. It is contended by the learned DR that the transfer of cash by any person other than banking company is illegal and prohibited by law. Therefore, if the assessee is carrying on any business of money transfer such business is illegal and if any such illegal business is carried out, the same cannot be allowed to set off against the profit of the legal business. He has stated that the business of the assessee of transfer of goods, post and parcel etc. is a legal business and separate profit from such legal business is to be worked out while the business of the assessee from transfer of cash is an illegal business and therefore loss from such illegal business is to be worked out separately. The loss from the illegal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the arguments of both the sides and perused the material placed before us. From the perusal of the assessment order of all the years under consideration, we find that there was no allegation by the AO that any part of the business carried on by the assessee is illegal business. The disallowance of interest by the AO was on the ground that the assessee kept huge cash balance. The assessee carried out only one business of Angadia and from such composite business, profit/loss is worked out in the respective years and the AO himself has treated the business of the assessee to be one business. The contention of the learned counsel that neither in any of the past years nor in the subsequent years, part of the business of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned AO not utilised for the business purposes of the assessee. The ld.CIT(A) deleted the disallowance observing that assessee s business was also consisting of transfer of money. Due to this business, the assessee was required to have sufficient cash always so that it can make payment of amount on due date. Thus, in the opinion of the ld.CIT(A) cash possessed by the assessee was its business asset and therefore, interest paid on borrowed capital for that cash was business expenditure of the assessee. We find that genuineness and reasonableness of payment of interest is not in dispute. The only dispute was that the borrowed funds were utilised for the purpose of business of the assessee or not. We find that the learned Departmenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -business purpose. The cash balance maintained in business is as per the needs as judged by the assessee. Therefore, we are of the view that the Learned Commissioner of Income Tax(Appeals) is legally and factually correct in holding that no disallowance of interest is called for. We, therefore, incline to uphold the order of Learned Commissioner of Income Tax(Appeals). Resultantly, Ground No. 1 of this appeal is rejected. No contrary decision is brought to our knowledge. The facts in the case of the assessee are identical to the facts in the above cases decided by the various Benches of the ITAT, we therefore, respectfully following the above decisions of the ITAT uphold the order of the CIT(A) and dismiss this ground of the Revenue. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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