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TMI Blog2018 (6) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... be made u/s 14A of the Act - above facts needs a proper examination that whether assessee has earned exempt income during the year or not. This fact is not available on record we have also verified only the documents available before us in the form of the balance sheet and profit and loss account. The copy of the computation was not placed before us. In view of this, we set aside this ground back to the file of the ld AO for proper verification that whether the assessee has earned any exempt income or not, if he finds that there is no exempt income earned by the assessee, disallowance deserves to be deleted Disallowance of interest on advance - held that:- In the present case, the CIT(A) has stated that interest on earlier loan was paid on car loans. However on examination of the balance sheet as at , for 31.03.2009 we find that the assessee has debited the financial expenses of ₹ 7.70 crores and where there was no disallowance was made u/s 36(1)(iii) on account of interest expenditure. Assessment order passed u/s 143(3) of the Act was placed before us, which confirmed above fact - we direct the ld AO to delete the interest expenditure on advance of ₹ 2.61 crores giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) by way of enhancement by adding an amount of ₹ 3,45,00,000/- to the supposed invested amount and that too by recording incorrect facts and findings and without giving opportunity of hearing. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in not deleting the disallowance of ₹ 20,16,615/- as made by Ld. AO u/s 14A and further in enhancing the disallowance in this regard is bad in law and against the facts and 5. That in any case and any view of the matter, action of Ld. CIT(A) in not deleting the various disallowances made in the impugned assessment order and enhancing the disallowance u/s 14A r.w.r. 8D(2)(ii) and (iii) is contrary to law and facts, void ab initio, beyond jurisdiction, and without giving adequate opportunity of hearing, by recording incorrect facts and findings and the same is not sustainable on various legal and factual grounds. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234B of the Income Tax Act, 1961. 7. That the appellant craves the leave to add, modify, amend or delete a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 3.45 crores as investment in other firm. He further directed that ₹ 10.81 crores advanced by the assessee in earlier years and he considered same given out of interest free funds available with the assessee. He further held that as the ld AR has stated that the advance of ₹ 26108650/- is only out of over draft account with bank, hence, he directed to work out disallowance on it only. Therefore, now assessee is contesting the interest disallowance on the above sum of ₹ 26108650/- only. 7. The ld AR submitted before us as under:- a. He submitted that interest cannot be disallowed on advances given in Assessment Year 2008-09 and where there is no finding that the above loan has been given out of interest bearing funds. He submitted that interest disallowance has not been made in the hands of the assessee for AY 2008-09 and 2009-10 which are prior to the impugned assessment year and Assessment Year 2011-12 which the subsequent assessment year all despite assessment framed u/s 143(3) of the Act. b. He further stated that it is established that the assessee has given the above sum out of overdraft account of the assessee. The over draft account has also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions. The assessee entered into an MOU with the borrower and provided funds to the company for purchase of land. It was stated by the ld AR that the beneficial ownership of as such land was with the assessee company, whereas the borrower was only legal owner. It is further stated that the amount of ₹ 11.14 cores was given not in the Assessment Year 2010-11 but in earlier years. It is stated that ₹ 8.53 crores was given in Assessment Year 2006-07, ₹ 2.60 crores in Assessment Year 2007-08. Therefore, that sum were given not in this year but in earlier years. It was further stated that no disallowance has been made in Assessment Year 2008-09 and 2009-10, but only in Assessment Year 2010-11. Hon'ble Delhi High Court in CIT Vs. Givo Ltd in order dated 27th July 2017 in ITA No. 941/2010 has held that the if in the past assessment years the interest expenditure has been allowed, it is not open to the AO to disallow the said expenditure in the impugned assessment year. It is further held that it would not be equitable to permit the revenue to take the difference stand in respect to the expenditure which was subject matter of the previous year‟s assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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