9911796707
TMI Blog2020 (10) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax Act, 1961 making disallowance of Rs. 3,15,3000/- and same being upheld by learned CIT (Appeals)-2, Jaipur, is bad in law as well as on facts and same needs to be cancelled. 2(a) That ld. Assessing Officer has erred in making disallowance of Rs. 3,14,300/- out of interest, on the ground that Appellant Company has purchased an industrial land for Rs. 40 lacs and paid Rs. 2.65 lacs for registration, which is not correct statement of facts. Ld. CIT (A) has also erred in upholding the same. (b) Full facts of the purchase of land was submitted and copy of Lease Deed was also filed before the ld. Assessing Officer, during the assessment proceeding and such Purchase of Land has no relevance to borrowed funds. Therefore, no mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionately to be disallowed. The AO accordingly passed an order under section 154 of the IT Act whereby interest of Rs. 3,15,300/- was disallowed in respect of the cost of acquisition of the land during the year under consideration. She has relied upon the orders of the authorities below. 3. Having considered the submissions of the ld. D/R and careful perusal of the orders passed by the AO as well as impugned order of the ld.CIT (A), it is noted that the assessee company filed its return of income on 25th September, 2012 declaring total income of Rs. 12,10,219/-. The AO completed the scrutiny assessment under section 143(3) on 8th January, 2015 at the total income of Rs. 12,99,720/-. Thereafter, the AO has passed the impugned order dated 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 154 of the IT Act. The ld. CIT (A) considered the fact that the assessee has availed cash credit limit on which the interest was paid during the year under consideration but no loan was taken by the assessee for purchase of land in question. Therefore, when the total borrowed funds of Rs. 5.92 crores is less than the total expenditure on the current assets of Rs. 7.43 crores then it becomes a matter of scrutiny to find out whether the borrowed fund has been utilized by the assessee for purchase of land in question. Prima facie, it appears that the assessee has made investment during the year in the current assets which is more than the borrowed funds, therefore, the borrowed funds was utilized by the assessee for the current assets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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