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TMI Blog2021 (8) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... LD THAT:- We find that the Ld. CIT(A) has deleted the disallowance relying on the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT] . We do not find any error or illegality in the finding of the ld. CIT(A). Accordingly, the grounds No. 2 3 of the appeal of the Revenue are dismissed. Disallowance of interest expenditure related to interest free advances u/s 36(1)(iii) - AO observed that building was put to use in the year under consideration and interest on money borrowed corresponding to the period for which the building was not put to use was computed - HELD THAT:- As assessee has already transferred the interest to preoperative expenses which has been allocated to fixed assets. The facts in the year under consideration are identical to assessment year 2010-11 [ 2019 (1) TMI 1062 - ITAT DELHI] thus, respectfully following the finding of the Tribunal (supra), we uphold the deletion of the addition by the Ld. CIT(A). The ground No. 4 to 6 of the appeal are accordingly dismissed. - ITA No. 1820/Del/2017 - - - Dated:- 25-8-2021 - SHRI O. P. KANT , ACCOUNTANT MEMBER AND SHRI K. N. CHARY , JUDICIAL MEMBER Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of bank loan reducing interest burden on the assessee? 6. Whether in facts and on circumstances of the case, Ld. CIT (A) is legally justified in allowing relief to the assessee on the basis of earlier orders in the assessee s own case despite the fact that principle of res-judicata is not applicable to Income Tax proceedings as each assessment year is a separate proceedings year? 7. That the appellant craves leave to add, amend, alter or forgo any ground/(s) of appeal either before or at the time of hearing of the appeal. 2. Briefly stated facts of the case are that the assessee was engaged in the business of equipment supply and engineering services. For the year under consideration, the assessee filed return of income on 29/09/2011, declaring total income of ₹ 16,97,32,094/-. The return of income filed by the assessee was selected for scrutiny assessment. In the assessment completed under section 143(3) of the Income-tax Act, 1961 (In short the Act ) on 16/03/2015, the Assessing Officer made certain additions/disallowance and assessed total income at ₹ 21,13,65,650/-. On further appeal, the Ld. CIT(A) deleted certain additions/disallowance. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance. Respectfully, following the finding of the Tribunal in the case of the assessee in immediately preceding assessment year, we uphold the finding of the Learned CIT(A). The ground No. 1 of the appeal of the Revenue is accordingly dismissed. 5. The ground No. 2 3 of the appeal of the Revenue are related to disallowance of ₹ 32,78,941/- under section 14A of the Act. 5.1 The Assessing Officer observed investment of ₹ 7,22,91,759/- made in the subsidiary and in view of the no disallowance made by the assessee under section 14A of the Act, the Assessing Officer made disallowance of ₹ 32,78,941/- for interest cost and other cost including manpower cost. The Ld. CIT(A) deleted the disallowance in view finding of his predecessor and no exempt income earned by the assessee. The relevant finding of the Learned CIT(A) is reproduced as under: 3.4.3 In the preceding assessment year 2010-11, my learned predecessor has deleted this addition holding as under: I have considered the assessment order framed by the Assessing Officer and the submissions made by the appellant. It is an admitted fact that the assessee had made investment of ₹ 7,22,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Respectfully following the decision of the Jurisdictional High Court I am of the view that the claim of the appellant needs to be upheld. The disallowance u/s Sec 14A is accordingly deleted. 5.2 We find that the Ld. CIT(A) has deleted the disallowance relying on the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd (supra). We do not find any error or illegality in the finding of the ld. CIT(A). Accordingly, the grounds No. 2 3 of the appeal of the Revenue are dismissed. 6. The grounds No. 4, 5 6 of the appeal relate to disallowance of interest expenditure of ₹ 54,339/- related to interest free advances under section 36(1)(iii) of the Act. 6.1 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The Assessing Officer obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly allocated to that particular asset and the expenses which were not directly allocable, were gathered in pre-operative expenses and allocated to the assets when they were first put to use. For this purposes, assessee has adopted guidelines issued by ICAIAS-10 AS-6. No fault is found by the Assessing Officer in the accounting policy adopted by the appellant. In view of above discussion, disallowance of ₹ 1,38,24,367/- is hereby deleted . Since there is no change in circumstances, respectfully following the decision of my learned predecessor, the disallowance of ₹ 54,339/- made by the AO u/s 36(l)(iii) is hereby deleted. Therefore, this ground of appeal is allowed. 6.2 The Tribunal in ITA No. 6681/Del/2014 for assessment year 2010-11 has upheld the deletion of ₹ 1,38,24,367/- under section 36(1)(iii) of the Act, in view of the fact that assessee has already transferred the interest to preoperative expenses which has been allocated to fixed assets. The facts in the year under consideration are identical to assessment year 2010-11, thus, respectfully following the finding of the Tribunal (supra), we uphold the deletion of the addition by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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