9911796707
TMI Blog2018 (12) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sh. K. N. Chary, Judicial Member For the Assessee : Sh. Salil Aggarwal, Advocate For the Revenue : Ms Ashima Neb, Sr DR ORDER PER: N. K. BILLAIYA, AM This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals]-11, New Delhi dated 02.06.2015 for Assessment Year 2011- 12. 2. The solitary grievance of the assessee is that the CIT(A) erred in upholding disallowance of ₹ 20,14,327/- out of an aggregate disallowance of ₹ 54,22,147/- u/s 36 (1) (iii) of the Act. 3. During the course of the scrutiny assessment proceedings the Assessing Officer noticed that the assessee had taken secured loans of ₹ 9.90 crores and ₹ 16.17 lacs on which it has paid int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made by the appellant. I am of the opinion that the claim of the appellant that the funds have been advanced to the partners for the purchase of property which was to be utilized for the business purposes, cannot be accepted as partnership property is in the name of the partners. Mere fact that property is to be utilized by the firm cannot be a ground to suggest that the interest paid on borrowed funds for the purchase of the property in the name of the partners is to be allowed as deduction. However, I am in agreement with the claim of the appellant that since interest of ₹ 43,21,601/- has already been recovered from Suresh Goel and Sons HUF in respect of the debit balance made available to Suresh Goel Son s HUF, the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,46,22,122/- V Net Debit Balance (E)= (C-D) 3,96,08,352/- VI Total borrowing (F) 10,66,07,621/- VII % age (G) = E/FX100 37.15% VIII Net interest claimed (H) 54,22,147/- IX Amount to be disallowed out of net interest claimed (I)=HXG 20,14,327/- X Relief to be allowed (J)= (H-I) 34,07,820/- Accordingly, out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the legitimate claim of deduction. In this behalf, I draw support from the judgment of the Hon ble Apex Court in the case of S.A. Builders Ltd. vs. CIT reported in 288 ITR 1 wherein it has been held as under: We wish to make it clear that it is not our opinion that in every case interest on borrowed loan has to be allowed if the assessee advances it to a sister concern. It all depends on the facts and circumstances of the respective case. For instance, if the directors of the sister concern utilize the amount advanced to it by the assessee for their personal benefit, obviously it cannot be said that such money was advanced as a measure of commercial expediency, However, money can be said to be advanced to a sister concern for commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount was advanced for earning profits. Considering the principles in the above judgment, it is clear that in the present case, the amount was given to the managing director and other persons only for the purchase of the land and also for business purposes and there is no transaction of loan involved in this case. In these circumstances, I do not find any error or illegality in the order of the Tribunal so as to warrant interference. It is a question of fact. It is not a perverse order. The order passed by the Tribunal is based on valid materials and evidence. Accordingly, the question raised is answered in favour of the assessee and against the Revenue. The appeal is devoid of merit and the same is dismissed. 6.4 I further draw support ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
