9911796707
TMI Blog2020 (9) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... e of 12% and in very few cases at the rate of 15% and 10.5 %. Admittedly the assessee has borrowed more amount on interest at the rate of 10.50%. AO has worked out average cost of the borrowed funds at the rate of 11.45% which appears very reasonable and logical in the given facts and circumstances. As such the assessee in none of the case has borrowed fund at the rate of 8.73% as claimed by him as the cost of borrowed fund. Accordingly, we do not find any merit in the argument of the assessee. Thus, we confirm the order of the authorities below. Hence the ground of appeal of the assessee is dismissed. - ITA. No. 936/AHD/2018 - - - Dated:- 1-6-2020 - SHRI RAJPAL YADAV, VICE PRESIDENT And SHRI WASEEM AHMED, ACCOUNTANT MEMBER App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put to use. (g) Appellant relies on Commissioner of Income Tax (Appeals) - VII, Ahmedabad Order Dt.26.02.2010 in the case of M/s. Calcutta Auto Stores (R.F.) for A.Y.2007- 08. (h) Attention is invited to decision of Madhya Pradesh High Court in the case of D H Secheron Electrodes Pvt. Ltd. v/s. Commissioner of Income Tax (142 ITR 528) in support. 3. The only issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by sustaining the disallowance of ₹ 17,20,954/- under section 36(1)(iii) of the Act, on account of diversion of interest-bearing fund. 4. Briefly stated facts are that the assessee in the present case is an individual and engaged in the wholesale business. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the preceding discussion we note that the assessee has agreed for the disallowance of the amount of interest on the amount diverted as interest-free loans and advances. As such the issue is limited to the extent of the rate of interest which needs to be applied on such interest-free loans and advances. As per the revenue the average rate of interest is 11.45% whereas the assessee claims the same to be at 8.73%. 10. However, from the order of the AO we find that the assessee in most of the cases has borrowed money on interest at the rate of 12% and in very few cases at the rate of 15% and 10.5 %. Admittedly the assessee has borrowed more amount on interest at the rate of 10.50%. However, the AO has worked out average cost of the borrow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der within 90 days of time by observing as under: 9. Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
