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TMI Blog2016 (5) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... tal, the interest cannot be disallowed. Further on the question of diversion of fund, it is by now well settled that the business wisdom of the assessee cannot be substituted by the assessing officer. Further the loan was actually taken for establishing a new unit and the utilization thereof is proved. Under these circumstances, we find that it cannot be said that the Tribunal has committed an error in deleting the disallowance made by the Assessing Officer or CIT (Appeals) of the amount of interest. No substantial question of law. - ITA NO. 229/2015 C/W ITA NO. 228/2015 - - - Dated:- 5-4-2016 - MR. JAYANT PATEL AND MRS. B.V.NAGARATHNA JJ. For the Appellant: Sri.K.V.Aravind, Advocate For the Respondent: Smt. Vani. H, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was charged by the assessee and assessed had failed to prove that the same was for the business purpose? 2. We have heard Mr.K.V.Aravind, learned Counsel appearing for the appellants-Revenue and Ms.Vani H. , learned Counsel appearing for the respondent-assessee. 3. We may record that so far as question No.1 is concerned, learned Counsel for the appellant-Revenu e has not pressed the said question and therefore the said question would not arise in the present appeals. 4. So far as question No.2 is concerned, the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal for brevity) in the impugned orde r has considered the said aspects from para-7.3 and 8 which read as under: 7.3 We have heard both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In the result, revenue s appeal is dismissed. 5. It may also be recorded that in the decision of the Bombay High Court in case of Godrej Boyce Mfg. Co. Ltd., Vs. Deputy Commissioner of Income Tax Anr. reported at (2010) 328 ITR 0081 , the view taken was that Rule 8(D) of the Income Tax Rules, (herein after referred to as the I.T. Rules for short) would apply with prospective effect and not retrospectively, has also been considered by the Tribunal. 6. As per the decision of the Bombay High Court in the above referred case, once Rule 8(D) of the I .T. Rules, is held to be having prospective effect, naturally it could not be applied to the assessment year in question and therefore, the view taken by the Tribunal ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prospectivity or retrospectivity of Rule 8(D) of the I.T.Rules. It is hardly required to be stated that the decision of any High Court would not be a precedent by deducing the result on facts of the case and the effect thereon. But it can be considered as a precedent only if the point is specifically considered and decided in either way. Under the circumstances, the decision of Kerala High Court is of no help to the learned Counsel for the appellants- Revenue. 10. Once the point is already concluded as per the decision of Bombay High Court referred to hereinabove, we do not find that any substantial question of law viz., question No.2 would arise for consideration as sought to be canvassed. 11. On question No.3 the relevant dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od under consideration, was only ₹ 9.60 Crores and the aggregate loans advanced by the assessee to this subsidiary including that of earlier year is approx.. ₹ 21.03. Crores. We also observe from the order of assessment, that the Assessing Officer has not established with any material evidence that the loans advanced interest free by the assessee to its subsidiary, Himatsingka Wovens P.Ltd. were diverted to it by the assessee from out of the Term Loan taken by it from banks for the existing manufacturing units at Filate and Seide or from out of loans taken for working capital for its existing units at Filate and Seide. 10.5.3 In view of the established fact that the interest of ₹ 44,71,565 claimed by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the existing manufacturing unit, may be as term loan or may be working capital, the interest cannot be disallowed. Further on the question of diversion of fund, it is by now well settled that the business wisdom of the assessee cannot be substituted by the assessing officer. Further the loan was actually taken for establishing a new unit and the utilization thereof is proved. 13. Under these circumstances, we find that it cannot be said that the Tribunal has committed an error in deleting the disallowance made by the Assessing Officer or CIT (Appeals) of the amount of interest of ₹ 44,71,565/-. In our view, no substantial question of law vide question No.3 would arise for consideration as sought to be canvassed. 14. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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