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TMI Blog2017 (5) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... h January 2106 is erroneous and prejudicial to the interest of the revenue. 2. The learned PCIT erred in holding that there has been inadequate enquiry, on allowability of interest under section 36(1)(iii) of the Act, falling within category of "no enquiry" and hence the order is erroneous and prejudicial to the interest of the revenue . The learned PCIT failed to appreciate that there has been complete application of mind by conducting detailed enquiry in the course of the regular assessment proceedings and acceptance of the view by the Assessing Officer supported by the jurisdictional High Court. Allowability of Claim u/s 36(1)(iii) 3. The learned PCIT erred in directing the Assessing Officer to disallow interest expenditure claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s 36(1)(iii) amounting to Rs. 74,08,219 and capitalizing the same as work in progress in respect of land purchased at Pali. 4. Aggrieved by the order of Ld. Pr. CIT, the assessee filed present appeal before us on the grounds mentioned herein above. Ground Nos 1 to 4. 5. Since all the grounds raised by the assessee are inter-connected and inter-related therefore we thought it fit to dispose of the same through the present common order. 6. The Ld. AR appearing on behalf of the assessee submitted that Ld. PCIT erred in exercising jurisdiction under section 263 of the Act by holding that order passed under section 143(3) of the Act dated 29.01.16 is erroneous and prejudicial to the interest of the revenue. Ld. AR further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the I.T. Act on the ground that the AO committed lapse of not applying his mind to the issue as the assessee had purchased land for development purposes but the same was shown as stock-in-trade and cost of capital borrowed for this was claimed as allowable deduction u/s 36(1)(iii) of the Act. The Ld. Pr. CIT also observed that the assessee company is dealing in developing and maintaining industrial and commercial infrastructure but not trading in real estate. Ld. AR appearing on behalf of assessee submitted that the assessee is engaged in the business of real estate trading, development etc. as reflected in the Memorandum of Association and for that purpose the assessee had purchased a land at village Pali for a consideration of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y CIT in the case of Rajmandir (Cal) and Subhalakshmi (Kol) are distinguishable on facts and on law as in those cases the AO did not enquire at all after calling for details of share capital and premium. In the present case, the AO after calling for details examined the issue in depth and partly disallowed the claim of interest and partly allowed the same. The observations made in Subhalakshmi by Kolkatta Tribunal supports the case of the assessee/appellant herein. Ld. AR further drawn our attention to the following judgments:- (a) CIT Vs Design & Autom. Eng P Ltd. 323 ITR 632 (Born) (b) CIT vs Reliance Comm. Ltd 69 TM.Com 103 (Born) (c) CIT Vs Nirav Modi 71 TM.Com 272 (Born) (d) CIT Vs Fine Jewellery55 TM.Com 514 (Born) (e) Naray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 69, 70, 75, 80 and 216 of the paper book also shows that the assessee on 12.04.12 entered into back to back agreement for sale of above land to Americorp and received advance for the sale of said land. Page no. 211 and 221 are bank statements of assessee and details of interest expenses and also shows that the agreement for sale of land to Americorp was terminated and therefore on that account, the assessee had taken loan from Indiabull in the month of Feb. 2013 to refund back the advance received in respect of sale of land in question to Americorp Business Services Pvt. Ltd. We have also perused page no. 3 to 13, 80, 81 and 91 of paper book which reflects that the issue of allowability of interest u/s 36(1) (iii) and 14A was exhaustiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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