9911796707
TMI Blog2021 (7) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation claimed on the equipments - AO did not allow sum claimed as depreciation against electrical installations and furniture s and fixtures on the ground that deduction for electrical installation and furniture fixtures already has been claimed u/s 24(a) - HELD THAT:- We note that the furniture fixtures and the equipments on which the depreciation has been claimed by assessee as an integral part of the rented premises on which standard deduction of 30% is claimed and allowed u/s 24 by Ld.AO. The primary condition as envisaged by Section 32 to claim the depreciation is that the assets should be used for the purposes of assessee s business which has remained unfulfilled in the present facts before us. Therefore, we are unable to concur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be allowed as deduction. 2.3 In any case, the advances given to sister concerns and other are out of business expediency and further there are sufficient free funds to support such advance and therefore also the finding as given by the Assessing Officer in Assessment order was erroneous. 2.4 The learned Assessing Officer had also erred in holding that alternatively as per the recast profit and loss account, the interest needs to be capitalized and the learned CIT(A) has erred in confirming the same. The observation/findings of Assessing Officer being without basis, totally erroneous on facts are to be rejected. 3. The learned Assessing Officer has also erred in not allowing a sum of ₹ 5,19,496/- claimed as depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,533/- being income from other sources. Ld.AO observed that, during the year under consideration, assessee claimed interest expense of ₹ 2,24,33,822/-. Assessee was called upon to explain the business expediency as well as allowability of said interest under section 36(1)(iii) of the Act, as borrowed capital was not used for business purposes. 2.1 The assessee in response submitted that during the year assessee had borrowed sum of ₹ 29.30 crores from Raligare Fine Investment Ltd. The utilisation of this loan was filed before the Ld. AO and submitted that, ₹ 13.36 crores was withdrawn by partners and the interest paid on the loan relatable to such withdrawal was debited to the partners account. The assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project(s) and hence interest would have to be capitalised with the closing work-in-progress. Thus the AO's stand that interest claimed cannot be allowed u/s 36(1)(iii) is upheld. However, as discussed in para 4.2.1 supra the disallowance of interest is to be restricted to ₹ 2,22,88,256/-. The appellant gets partial relief w.r.t. to these grounds of appeal. 4.2.5 One additional aspect that has been raised by the appellant during appellate proceedings is that the appeal for A.Y.2014-15 on the similar issue has been decided in favour of the appellant. I have perused the said appellate order and find that the Id. CIT(A) had allowed the appellant's appeal for that year on the grounds that the AO had merely reproduced wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 2.1-2.4 is in respect of the disallowance of interest under section 36(1)(iii) of the Act. 5.1 The Ld.AR submitted that, assessee took loans from Raligare Fine Investment Ltd., which was used to repay the medterm loan from PNB bank and PNB Corporate loans, that was earlier taken by assessee for investment in commercial property towards purchase of land etc. A detailed chart was relied by the Ld.AR forming part of the Ld.CIT(A) order at page 4. It was submitted that assessee used the borrowed funds for the purpose of business. Ld.AR also submitted that assessing officer erred in recasting the profit and loss account and considered it to be work in progress. The Ld.AR submitted that, assessee has interest-free funds which is evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furniture fixtures already has been claimed under section 24(a) of the Act. 6.2 We have considered the arguments advanced by both sides. 6.3 We note that the furniture fixtures and the equipments on which the depreciation has been claimed by assessee as an integral part of the rented premises on which standard deduction of 30% is claimed and allowed under Section 24 of the Act by Ld.AO. The primary condition as envisaged by Section 32 to claim the depreciation is that the assets should be used for the purposes of assessee s business which has remained unfulfilled in the present facts before us. Therefore, we are unable to concur with the stand of the Ld.AR, in this regard. Accordingly this ground raised by assessee stands dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
