9911796707
TMI Blog2013 (12) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... The sole grievance of the assessee revolves around the disallowance of interest expenses amounting to Rs. 85,17,298/- for assessment year 2007-08 and Rs. 98,31,014/- for A.Y. 2008-09. 3. During the course of the assessment proceedings for A.Y. 2007-08, the AO noticed that the assessee has paid interest of Rs. 85,17,298/- on unsecured loan from ACT Fininvest Pvt. Ltd., and Peninsula Land Ltd. on the loans borrowed in the earlier years for the purpose of purchase of Tenancy Development Rights(TDR). The Assessing Officer observed that the assessee has neither purchased TDRs nor have sold any TDRs during the year under consideration. The AO issued notice dt. 24.11.2009 giving an opportunity to the assessee to show cause as to why this interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan borrowed cannot be considered for the purpose of business and accordingly disallowed the interest of Rs. 85,17,298/-. 5. The assessee agitated this matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) was of the opinion that the assessee has utilized interest bearing funds for non business purposes and accordingly confirmed the assessment of the AO. 6. The assessee is aggrieved by this finding of the Ld. CIT(A) and is before us. The Ld. Sr. Counsel drew our attention to page-7 of the Paper book and pointed out that during the financial year 2004-05 pertaining to A.Y. 2005-06, the assessee has borrowed funds from ACT Fininvest Pvt. Ltd. at Rs. 50.32 crores. The same amount was outstanding as on 31.3.2005 and on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of Rs. 6,76,905/- has been accepted by the Ld. CIT(A) as pertaining to the purposes of business vide his order dt. 14.10.2009. We find that the revenue had accepted this order of the Ld. CIT(A). In the subsequent year i.e. 2006-07, part of the loan was repaid and during the year under consideration to repay the balance loan of ACT Fininvest Pvt. Ltd. amounting to Rs. 6.07 crores, the assessee has borrowed 7.74 crores from Peninsula Land Ltd. The entire factual matrix can be summed up as - "assessee has swapped earlier loan by new loan". If the earlier loan was accepted as taken for the purposes of business, we fail to understand how can the new loan cannot be accepted for the purposes of business. Akin to this transaction the CB ..... X X X X Extracts X X X X X X X X Extracts X X X X
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