9911796707
TMI Blog2024 (11) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... own funds available with the assessee and consequently no disallowance could be made with respect to interest paid which are relatable to interest free loans. The case of the assessee is squarely covered by the decision of Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] and CIT Vs. HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] No infirmity in the order of the Ld. CIT(A) and accordingly, the same is affirmed by dismissing the appeal of the revenue. - Shri Rajesh Kumar, AM And Shri Sonjoy Sarma, JM For the Appellant : Shri Miraj D. Shah, AR For the Respondent : Shri Prakash Nath Barnwal, CIT, DR ORDER PER SHRI RAJESH KUMAR, AM This appeal filed by the revenue is against the order of Ld. CIT(A), NFAC, Delhi date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the undisputed position that emerges is that the assessee has paid interest expenses of Rs. 5,18,27,770 and earned interest income of Rs. 6,44,00,279. The loans advanced by the appellant amount to Rs. 148,52,52,780 and the loans taken by it amount to Rs. 126,89,66,690. The appellant has not charged interest on loans advanced to 23 odd parties, while interest was charged from other parties. The AO disallowed entire interest expenses of Rs, 5.18 crore, which were made through banking channels after deducting TDS. On the basis of these facts, I am of the considered opinion that the disallowance of entire interest is not sustainable in the eyes of law. No statutory provision has been brought on record by the AO which mandate deletion of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , non-charging of interest was fully justified by the appellant and the same could be said to have been out of commercial expediency. In such a scenario the ratio of decision of Hon'ble Supreme Court in the case of S.A. Builders Ltd. (supra) would be applicable wherein it was held that once it was established that there was nexus between the expenditure and purposes of business, deduction u/s 36(1 ) (iii) was to be allowed. It was further held that the expression 'commercial expediency' is an expression of wide import and includes such expenditure as prudent businessman incurs for the purpose of business. The total expenditure incurred toward interest payment in the instant case was Rs. 5.18 crores. This expenditure may not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and business expediency by relying on the decision of S. A. Builders Ltd. Vs. CIT, Civil Appeal No. 5811 of 2006 and the decision of Hon ble Apex Court in the case of Hero Cycles Ltd. Vs. CIT [2015] 63 taxmann.com 308/379 ITR 347. Besides, it was also observed by us from the order of the Ld. CIT(A) that assessee s own interest free funds comprising of share capital, reserves and surplus and interest free loans were far more than the interest free loans then the presumption is that interest free loans were advanced out of interest free own funds available with the assessee and consequently no disallowance could be made with respect to interest paid which are relatable to interest free loans. The case of the assessee is squarely covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
