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TMI Blog2013 (10) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... been lent to the sister concern/s, so as to set off the interest suffered against the interest received on loans to the said concern/s - Argument, i.e., of set off of the interest received against that paid, it would be noted, also contradicts the assessee's claim of the secured (bank) loans being toward financing the current assets of its business – The case is fit and proper that the matter is restored back to the file of the A.O. for a proper examination of the assessee's case, even as the onus to establish its claim/s would only be on the assessee, and decide the same in accordance with law, issuing definite findings of fact. X X X X Extracts X X X X X X X X Extracts X X X X ..... aw an inference of the investments having been financed, even to the proportionate extent, by borrowings, which are primarily in the form of secured loans, outstanding at Rs.1110.86 lacs as on 31.03.2008, the relevant year-end. Further, this position gets all the more accentuated as the assessee has received interest for the year at Rs.202.70 lacs, i.e., in excess of Rs.116.92 lacs incurred by it by way of interest for the relevant year, and which stands allocated proportionately, leading to the impugned disallowance, placing a copy of its balance- sheet for the relevant year on record. In fact, there have been decisions by the tribunal, as by its Kolkata Bench in the case of Dy. CIT vs. Trade Apartment Ltd. (in ITA No.1277/Kol./2011 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be evident from the fact that as against an average investment of Rs.86.39 crores and borrowing of Rs.11.11 crores, the interest disallowed works to a meager Rs.10.75 lacs. There is, therefore, both factually and legally, no occasion or basis for its deletion. 3. We have heard the parties, and perused the material on record. The issue, we may clarify, turns essentially on the facts of the case. If the assessee is able to, with reference to its accounts, exhibit that the borrowings have been applied for financing its business assets, viz. stock-in-trade, debtors, etc., there would be no occasion to appropriate any part of the interest thereon toward investments, leading to a disallowance u/s.14A. It is only in the absence of a clear find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the bank have been made for specific business purposes. The assesse ought to have been therefore required by them to specify and substantiate those purposes and, further, exhibit the actual application of the borrowing toward the same, i.e., with reference to its accounts for the year, rather than being ignored or brushed aside. Where the assessee has maintained adequate inventories of the relevant assets, i.e., the current assets (net of the spontaneous current liabilities) during the year, as it appears on the basis of the current assets/liabilities at the beginning as well as at the end of the year, the assesse has a prima facie case, which the ld. AR was required to show by us during hearing so as to justify his case for a remand. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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