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TMI Blog2018 (1) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also uncontroverted fact that there was no extension of existing business by the assessee. Hence, we are unable to concur with the view taken by Ld. CIT(A) and therefore, inclined to reverse the same. Hence, by deleting the impugned additions, we allow assessee’s appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be capitalized. However, not convinced, Ld. AO worked out proportionate interest against the same which came to ₹ 43.20 Lacs and disallowed the same u/s 36(1)(iii). 3. Aggrieved the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 08/10/2013 where the Ld. CIT(A), while confirming the action of Ld. AO in making disallowance u/s 36(1)(iii), directed him to re-work the same in the light of error being pointed out by the assessee by way of rectification application u/s 154. The matter was thus concluded by Ld. CIT(A) in the following manner:- 5.3.1 I have carefully and dispassionately considered the facts and circumstances of the case. The appellant had not capitalized interest on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to dispose off the appellant's rectification application as per provisions of section 154 of the Act in accordance with the CBDT Instruction No.3/2013 issued vide F.No.225/76/2013/ITA.II dated 5th July, 2013. Under the circumstances, the LAO is directed to consider the arithmetic error in relevant assessment order and rectify the mistake apparent from record as per law after due verification of the facts at the time of giving appeal effect. For statistical purposes, ground of appeal No.2 is partly allowed. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Counsel for Assessee, at the outset drew our attention to the erroneous computations made by the Ld. AO while arriving at the impugned disallowance and contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR before us. From the perusal of financial statements, it is quite evident that the interest free funds in the shape of Share Capital & Free Reserves far exceed the closing capital work-inprogress and moreover, the reserves & surplus has grown from 8053.44 Lacs to ₹ 10818.15 Lacs and therefore, a presumption has to be drawn that the CWIP was carried out by the assessee out of own interest free funds. The lower authorities could nowhere prove the nexus of borrowed funds with CWIP being carried out by the assessee despite being pointed out by the assessee before lower authorities. It is also uncontroverted fact that there was no extension of existing business by the assessee. Hence, we are unable to concur with the view taken by Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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