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TMI Blog2014 (1) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... crores borrowed from GE Capital at an interest rate of 7.5% p.a. This amount was directly advanced on the same date to Lakshdeep Investment & Finance Pvt. Ltd. from whom it had received interest @ 10% - no part of the borrowed funds were utilised for giving interest free advances so as to disallow any part of the interest paid by the assessee - The order of the CIT(A) with regard to factum of non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed to law and facts of the case. 2(a). On the facts and in the circumstances of the case and in law CIT(A) erred in deleting the disallowance of interest expenses of Rs.1,22,86,301/- (Rs.1,01,59,364/- for A.Y. 2006-2007) which was charged @ 12% on advances paid to Commercial Construction Corpn, Satguru Homes Dosti Corpn. Without any commercial and any business expediency. 2(b) O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the assessee in monetary terms, though not under the nomenclature interest. The Assessing Officer, however, proceeded on the footing that the assessee has no justifiable reason to advance amounts to certain parties without proper agreements and that too without charging any interest and thus concluded that the entire arrangement appeared to be sham. Under the circumstances, he calculated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the interest bearing funds were not utilised for business purpose. In paras 8.3 and 8.4 of the Order for A.Y. 2005-2006 the learned CIT(A) observed that the interest paid by the assessee pertains to the amount of Rs.20 crores borrowed from GE Capital at an interest rate of 7.5% p.a. This amount was directly advanced on the same date to Lakshdeep Investment Finance Pvt. Ltd. from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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