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TMI Blog2019 (8) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... s is available it should be possible to segregate the use of aircraft for business purposes and personal purposes. In that case, the disallowance should be restricted to proportionate amount attributable to personal use of aircraft. Since this fact require the verification, we set aside the order passed by ld CIT(A) on this issue and restore the same to the file of the AO with the direction to restrict the disallowance to the personal usage of aircraft as per log book records. Disallowance of interest expenditure by capitalizing it towards WIP - addition made in normal computation as well as u/s 115JB also - HELD THAT:- We noticed that the own funds available with the assessee is more than the amount of Capital work in progress as on 31/3/2010. It is also the contention of the assessee that the term loans and working capital loans have been used for specific purposes. Be that as it may, if the own funds available with the assessee is in excess of amount of capital work in progress, the presumption that could be drawn is that the assessee has used its own funds for funding the capital work in progress, in which case disallowance of interest is not called for. We notice that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gurunathan, Advocate For the Revenue : Dr. P.V Pradeep Kumar, Addl. CIT (DR) ORDER PERB.R BASKARAN,ACCOUNTANT MEMBER These cross appeals are directed against the order dated 16-06-2016 passed by Ld CIT(A), Hubli and it relates to the assessment year 2009-10. 2. The assessee is in appeal in respect of following issues:- (a) Disallowance made u/s 40(a)(ia) (b) Disallowance towards personal usage of Aircraft. 3. The Revenue is in appeal on the following issues:- (a) Disallowance of interest relating to work in progress (b) Disallowance towards personal usage of Aircraft. (c) Disallowance of prior period expenses. 4. The assessee is engaged in the business of transportation of goods, courier service, passenger travels and wind power generation of electricity. The assessment in the hands of the assessee for the year under consideration was completed by the AO u/s 143(3) of the Act determining the total income at Nil and computing book profit at ₹ 45.31 crores. Not satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the relief granted by him. 13. The ld AR submitted that the assessee has maintained log book for usage of the aircraft, wherein use of aircraft for personal purposes is also recorded. He submitted that the AO and CIT(A) has made disallowance on some basis, without considering the log book. He submitted that the assessee is agreeable for disallowance, but it should be restricted to actual usage for personal purposes of the Directors. 14. We heard the ld DR and perused the record. Since the assessee is claiming to be maintaining log book, there is merit in the contentions of the assessee. When the log books is available it should be possible to segregate the use of aircraft for business purposes and personal purposes. In that case, the disallowance should be restricted to proportionate amount attributable to personal use of aircraft. Since this fact require the verification, we set aside the order passed by ld CIT(A) on this issue and restore the same to the file of the AO with the direction to restrict the disallowance to the personal usage of aircraft as per log book records. 15. We shall now take up the appeal filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in progress as on 31/3/2010. It is also the contention of the assessee that the term loans and working capital loans have been used for specific purposes. Be that as it may, if the own funds available with the assessee is in excess of amount of capital work in progress, the presumption that could be drawn is that the assessee has used its own funds for funding the capital work in progress, in which case disallowance of interest is not called for. We derive support for this proposition from the decision rendered by Hon ble Bombay High Court in the case of Reliance Utilities Power Ltd (313 ITR 340). However, we notice that these factual aspects have not been examined by the AO. Hence, for the limited purpose of examining the factual aspects, we restore this issue to the file of the AO and direct him to delete the addition on being satisfied that the own funds available with the assessee is in excess of amount of capital work in progress. 21. With regard to the addition made by the AO while computing book profit u/s 115JB of the Act, we noticed that the ld CIT(A) has taken support of the decision rendered by Hon ble Supreme Court in the case of Apol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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