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TMI Blog2012 (5) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... 42.46 lacs spent on furnace and ₹ 33.23 lacs on the building as against the net profit of the assessee for the year at ₹ 1.97 crores. We find no merit in the disallowance made by the Assessing Officer. Uploading the order of the CIT (Appeals) we dismiss ground No.1 raised by the Revenue. TDS u/s 194A - addition made by invoking provisions of section 40(a)(ia) - Held that:- The payment of interest being made to a bank is outside the purview of deduction of tax under section 194A of the Act. Thus, the assessee was not liable to deduct TDS on such payment of interest on the installment due to M/s UTI Bank Ltd. Upholding the order of the CIT (Appeals) we dismiss ground No.2 raised by the Revenue. - ITA No.975/Chd/2011 - - - Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oked the provisions of proviso to section 36 (1) (iii) of the Act and computed the interest relatable to capital work-in-progress, i.e. the amount utilized for acquisition of new asset for extension of existing business, for any period beginning from the date on which capital was borrowed till the date on which said asset was put to use and disallowed sum of ₹ 6,33,729/-. The computation of income relatable to the capital work- in-progress of furnace and factory building is tabulated at pages 3 and 4 of the assessment order. 5. The CIT (Appeals) vide para 3.2 of the appellate order observed that the capital investment was made in furnace and building from internal accrual. The CIT (Appeals) noted that the net profit of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to use, shall not be allowed as a deduction. 9. The provisions of main section and the proviso are in relation to the amount of interest payable on capital borrowed. The first juncture thus to be seen is whether the assessee had borrowed any capital for the purposes of investment in capital asset for extension of existing business or profession. In the facts of the present case, there is no finding by the Assessing Officer in respect of the borrowals made by the assessee for the purposes of investment in capital work-in-progress. The Assessing Officer noted that the assessee had shown capital work-in-progress in its Balance Sheet and consequently computed disallowance in view of the provisions of proviso to section 36(1)(iii) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the assessee following he order of the Tribunal in the preceding year. 13. We have heard the rival contentions and perused the record. The contention of the assessee in respect of the above said payment of interest was that the borrowals were made from UTI Bank Ltd. and M/s SREI Finance Ltd. was only a representative of the UTI Bank for processing the application and certain other duties as provided in the agreement executed between UTI Bank and the borrower i.e. the assessee company. The learned A.R. for the assessee drew our attention to the copy of the loan agreement with UTI Bank and M/s SREI International Finance Ltd., which is placed at pages 7 to 21 of the Paper Book. The learned A.R. for the assessee also referred to the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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