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TMI Blog2015 (4) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... f fresh capital on which no claim of any interest had been made in the books. AO has not at all taken into consideration as to how this fund was utilized. Further, assessee has also pointed out that it had received interest free loan, which has been reproduced earlier. In any case, the assessee s claim was that the entire borrowed funds had been utilized for business purposes and not for acquisition of fixed assets. In view of above discussion, we do not find any reason to interfere with the order of ld. CIT(A) and the same is upheld. - ITA No. 1862/Del/2012 A.Y. 2008-09 - - - Dated:- 24-4-2015 - SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY: JUDICIAL MEMBER Appellant by : Smt. Y. Kakkar DR O R D E R PER S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P L a/c, assessee had claimed expenses on account of payment of interest as per following details: i. Interest and bank charges ₹ 17,48,553/- ii. Interest on car loan ₹ 91,929/- iii. Interest on loan ₹ 4,61,798/- ₹ 23,02,280/- 5. From the comparison of balance-sheet as on 31-3-2007 and 31-3- 2008, the AO noticed that there was increase in fixed assets aggregating to ₹ 1,98,31,778/- and also increase in unsecured loan of ₹ 40,56,876/-. He examined the schedule of fixed assets and noticed that assessee during the year under consideration had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 8,25,000/- 6. The AO, however, did not accept the assessee s contention and pointed out that in view of proviso to section 36(1)(iii), since the asset was not put to use, the interest could not be allowed qua the fixed asset for the acquisition of which the borrowed capital was utilized. He further observed that assessee failed to give any details as to what was the exact fund borrowed and utilized towards purchase of new asset and further failed to prove or give any details for such interest attributable to the funds borrowed and use for the purpose of acquisition of new asset. He, accordingly, disallowed ₹ 22,10,351/-. 7. Before ld. CIT(A) the assessee had, inter alia, pointed out that the investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come referred to in section 28 . . (iii) the amount of the interest paid in respect of capital borrowed for the purpose of the business or profession. Provided that any amount of the interest paid, I respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalized in the books of account or not); for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction . 10. A bare perusal of the proviso to section 36(1)(iii) clearly reveals that there should be specific finding that the amount of interest paid is in respect of capital borrowed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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