9911796707
TMI Blog2025 (3) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... indings of the CIT(A) wherein she has allowed the necessary deduction towards the liability in respect of the interest which has accrued during the financial year relevant to the impugned assessment year. In the result ground of appeal so taken by the Revenue is dismissed. Disallowance made u/s 14A - HELD THAT:- Admittedly, the assessee has not earned any exempt income during the financial year relevant to impugned assessment year 2017-18, in such a situation, the question of disallowance of any expenditure under section 14A r.w. Rule 8D does not arise for consideration - the addition so made and upheld by the Ld. CIT(A) is hereby directed to be deleted. Disallowance u/s 36(i)(iii) - amount of interest so capitalized has been done after carrying out the calculation on scientific basis following the well accepted accounting policy which is in consonance with the provision of Section 36(1)(iii) - HELD THAT:- Nothing has been brought on record to rebut the findings of the CIT(A) who has rightly taken into consideration the accounting policy so adopted by the assessee in terms of allocation of interest expenditure, the actual expenditure so allocated by the assessee and further, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 543,22,40,378/- and on the other hand, the assessee claimed interest expenses of Rs. 197,80,77,388/ - vi) It is prayed that the order of the Ld. CIT(A) be set-aside and that of the AO he restored. vii) The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off. 3. Briefly the facts of the case are that the assessment was originally completed under section 143(3) vide order dt. 30/11/2010. Thereafter notice under section 148 dt. 23/01/2013 was issued after recording reasons which were duly served on the assessee. In response to the notice, the assessee filed its return of income and thereafter notice under section 143(2) and 142(1) were issued, calling for necessary information documentation. Thereafter the assessment was completed under section 143(3) r.w.s 147 of the Act vide order dt. 31/12/2023 wherein the reassessed income was determined at Rs. 2,54,79,04,707/- as against original assessed income of Rs. 1,56,95,34,890/-. The assessee thereafter carried the matter in appeal before the Ld. CIT(A) who has since deleted the said addition and against the said findings, the Revenue is in appeal before us. 4. In Ground No. 3, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculation filed by the appellant, it is observed that the interest amount under consideration represents the interest on installment which accrues till the last date of the F.Y. However the due date of which falls in the subsequent year therefore the interest expenses booked by the assessee is an actual and ascertained liability of the assessee corporation. It was held by the ld CIT(A) that since the amount represents the actual and ascertained liability, the addition made by the AO was deleted. 7. During the course of hearing the Ld. CIT DR relied on the findings of the AO whereas the Ld. AR reiterated the submissions made before the Ld. CIT(A) and supported her findings. 8. After hearing both the parties and considering the material available on the record, we find that the findings of the Ld. CIT(A) wherein she has stated that the amount represents the actual and ascertained liability and not the provision remains unrebutted before us. Therefore in light of the same we do not see any infirmity in the findings of the Ld. CIT(A) wherein she has allowed the necessary deduction towards the liability in respect of the interest which has accrued during the financial year relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The submissions so filed by the assessee were considered and the Ld. CIT(A) deleted the addition. As per the Ld. CIT(A), it is an undisputed fact that the assessee has not derived any exempt income from its investment with Uttar Haryana, Dakshin Haryana, BBMB and IPGCL. Since no exempt income has been derived by the appellant, no disallowance under section 14A r.w. Rule 8 D is warranted. The Ld. CIT(A) also referred to the decision of Jurisdictional Punjab and Haryana High Court in the case of CIT Vs. Lakhani Marketing (2014(7) TMI 44 Punjab and Haryana High Court, decision of Coordinate Chandigarh Bench in case of M/s Oasis Merchants Private Limited Vs, The ACIT, Circle 7, Ludhiana 2017 (7) TMI 356 and also the fact that the AO while completing the assessment under section 147 r.w.s 143 for A.Y 2010-11 and 2011-12 has accepted the contention of the assessee that the provision of Section 14A are not applicable and no disallowance is called for. It was further held by the Ld. CIT(A) that since no new investment have been made and the facts and circumstances of the case are same as far as A.Y 2010-11, 2011-12, the addition made by the AO by ignoring the past precedence and the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the amount of interest paid on borrowings for acquisition of fixed assets in respect of the interest falling due during the construction period amounting to Rs. 25,69,31,741/- has been duly capitalized. It was submitted that the amount of interest so capitalized has been done after carrying out the calculation on scientific basis following the well accepted accounting policy which is in consonance with the provision of Section 36(1)(iii) of the Act. It was submitted that the accounts of the assessee have been audited by the Statutory Auditors as well as C&AG and no observations were raised on the working or calculation of interest so capitalized in respect of fixed assets and it was also submitted that similar issue was raised while reopening of the assessment for A.Y 2010-11 and after considering the submissions of the assessee, the same has been accepted by the AO. The submissions so filed by the assessee were considered by the Ld. CIT(A) and she has deleted the addition so made by the AO. The Ld. CIT(A) in her findings stated that the assessee have been following accounting policy where the interest on borrowed funds attributable to acquisition / construction of fixed assets ..... 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