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TMI Blog2018 (12) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... terest free funds being far from excess of the funds deployed in the new projects and absence of any factual findings about the diversion of funds is not even disputed by the learned Departmental Representative. The disallowance of interest on the borrowings from the Citi Bank, which is solely based on the assumption that the borrowings from the Citi Bank have been used in the new projects – something which is not burnout from the material on record, is devoid of legally sustainable basis. Learned CIT(A)’s conclusions are based on surmises and conjectures. In the light of these discussions, and bearing in mind entirety of the case, we direct the Assessing Officer to delete the impugned disallowance - Decided in favour of assessee - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance u/s 14A is required. 3. On this issue, learned Counsel for the assessee submits that the matter is now covered by Hon ble jurisdictional High Court s judgment in the case of CIT Vs Corrtech Energy Pvt Ltd [(2015) 372 ITR 97 (Guj)] inasmuch as the assessee did not have any exempt income in the present assessment year and that in a situation in which the assessee does not have any income exempt from tax, the question of disallowance under Section 14A does not arise. Learned Departmental Representative dutifully relies upon the stand of the authorities below. 4. Respectfully following the esteemed views of the Hon ble jurisdictional High Court in the case of Corrtech Energy Pvt Ltd (supra) and in view of the undisputed factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of the detailed reasons as given in the foregoing paras and also the assesses has not furnished any details nor evidences in support of its claim that the money borrowed was utilized for financing its long term requirements including refundable long term security deposit to the mall owners. In view of the above, interest payment of ₹ 63,63,355/- as debited in the Profit Loss account is disallowed out as revenue expenditure and the same is treated as capital expenditure. As the assesses has not given evidence of put to use of the relevant assets, the depreciation is not being allowed in the year under consideration. 8. Aggrieved, the assessee carried the matter in appeal before the CIT(A). In the proceedings before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the noninterest bearing funds available to the assessee, and, therefore, a presumption, in the absence of any specific details to the contrary, to be taken is that the investment in the new projects is out of the interest bearing funds. This approach has been duly recognized in the Co-ordinate Bench decision in the case of CIL Nova Petrochemicals Ltd Vs. DCIT (ITA Nos. 2875 2876/Ahd/2014, vide order dated 10.07.2018). One more Co-ordinate Bench of this Tribunal, in the subsequent year, in the case of same assessee (ITA No.388/Ahd/2016, order dated 13.08.2018) has also adopted the same approach and observed as follows:- With the assistance of the ld. representatives, we have gone through the record carefully. The assessee has placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record, is devoid of legally sustainable basis. Learned CIT(A) s conclusions are based on surmises and conjectures. In the light of these discussions, and bearing in mind entirety of the case, we direct the Assessing Officer to delete the impugned disallowance of ₹ 63,52,554/-. Assessee gets the relief accordingly. 13. Ground no.2 is thus allowed. 14. In the result, the appeal of the assessee is allowed. 15. We now take up the appeal filed by the Revenue. Grievance raised by the Assessing Officer is as follows:- Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the additions made on account of disallowance u/s 14A of the Act in computation of Book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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