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TMI Blog2024 (10) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest free funds, provided the interest free funds available are sufficient to meet the amount of such advances. It is also well settled that the AO cannot question the commercial wisdom/expediency. AO cannot place himself in the armchair of the assessee. The only aspect which would normally enter into the consideration of the AO is whether the interest free funds available are sufficient to meet the interest free advances or advances at a lower rate of interest. It can thus be seen that it would essentially be an exercise of examination of the facts pertaining to the particular assessment year. CIT-DR is right that an omnibus reliance cannot be placed in such a case on the previous decision in the assessee s own case inasmuch as the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . BASKARAN, ACCOUNTANT MEMBER For the Appellant: Ms. Mahita Nair For the Respondent: Shri Suchek Anchaliya Ms. Vaishali More ORDER PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT : The challenge in this appeal by the Revenue is to the order dated 22.06.2023 passed by the Commissioner of Income Tax (Appeals) ( CIT(A) for short), which in turn arose out of the order dated 06.12.2018 passed by the Dy. Commissioner of Income Tax ( Assessing Officer for short), for assessment year 2016-17. 2. The CIT(A) by the impugned order has deleted the additions made by the Assessing Officer on the following counts :- (i) Rs. 7,25,09,930/- towards excess of interest expenditure on unsecured/ bank loans; (ii) Rs. 1,33,17,919/- towards brokerage/commission; and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself in the armchair of the assessee, questioning the commercial expediency. It was thus contended that the impugned additions made were not justified. 7. The CIT(A) after considering the submissions, has deleted the additions made, which is the subject matter of challenge in this appeal at the instance of the Revenue. 8. A perusal of the impugned order passed by CIT(A) will show that the CIT(A) has relied upon an earlier decision of this Tribunal in respect of assessee s own case for assessment year 2015-16 (ITA No. 5064/Mum/2018 decided on 13.07.2020). The CIT(A) after extensively reproducing the findings recorded by this Tribunal in the aforesaid appeal has thereafter concluded in para 6.4 that the facts as obtaining in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-assessee, on the contrary, has supported the impugned order. It is submitted that the CIT(A) has rightly considered the decision of the Tribunal in assessee s own case for assessment year 2015-16, particularly when the CIT(A) found that the facts for the year under consideration are identical. It is thus submitted that the CIT(A) after examining the facts as obtaining in the present case has proceeded to abide by the decision of the Tribunal for the earlier period in the assessee s own case. It is submitted that in a case where the assessee has sufficient interest free funds available, then the presumption is that the interest free advances or advances at lower rate of interest are made out of such interest free funds and not out of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds Applied 3,45,78,21,180 With reference to the same, it is submitted that the assessee had total interest free funds of Rs. 153,88,65,770/- and the interest free loans and advances given are to the extent of Rs. 101,90,48,922/-. It is submitted that the reliance placed by the Assessing Officer on the decisions of Hon ble Bombay High Court in Phaltan Sugar Works Ltd. vs CWT, 208 ITR 989 (Bom.) and Phaltan Sugar Works Ltd. vs CIT, 215 ITR 582 (Bom) are misplaced as the said decisions have been overruled by the Hon ble Supreme Court in S.A. Builders Ltd. vs Commissioner of Income Tax (Appeals), 288 ITR 1 (SC). He, therefore, submitted that the impugned order does not call for any interference. 12. We have carefully considered the rival circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2015-16 in respect of which there is already an order passed by the Tribunal in assessee s favour deleting the addition made towards excess of interest expenditure. 13. In that view of the matter, we have made an attempt to examine the facts and have found on the basis of the statements as reproduced above that even under the year under consideration, assessee had sufficient interest free funds so as to cover the advances made on interest to related parties except in case of Shreepati Build Infra Investment Ltd. where the rate of interest is said to be 9%. For all other related parties, the interest rate charged is 12%. Insofar as Shreepati Build Infra Investment Ltd. is concerned, the promoter is shown to be a shareholder/Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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