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of <h1>Tribunal allows Revenue's appeal on interest and transactions, remits case for fresh consideration.</h1> The Tribunal allowed the Revenue's appeal, setting aside the order disallowing interest paid to a bank and the commercial expediency in a transaction with ... Disallowance - Interest paid by the appellant on account of borrowings made from the Bank which was subsequently given to M/s. ASM Technologies Ltd. as security deposit to provide office space for its use - To establish the genuineness of the transaction the most important factor will be whether the appellant has utilized the premises for its use as claimed -However no materials were brought before us to establish that the appellant had occupied the premises and conducted its activities from the premises - The documents submitted by the Revenue did not conclusively establish that the appellant had utilized the premises for its business - It is claimed that the appellant was in possession of 11,000 sq.ft. of office space with infrastructure and facility to accommodate 80 engineers - In such circumstances, the appellant should be definitely in a position to establish that it had utilized the premises by furnishing evidence for payment of electricity bill, etc. from its bank account - Find it just to grant one more opportunity to the appellant to produce the requisite evidence before the ld. CIT (A) - Thus, the case is remitted back to the file of the ld. CIT(A) for fresh consideration on merits Issues:- Disallowance of interest paid to M/s. Lord Krishna Bank- Commercial expediency in the transaction with M/s. ASM Technologies Pvt. Ltd.- Utilization of premises for business purposesIssue 1: Disallowance of interest paid to M/s. Lord Krishna BankThe Revenue appealed against the order of ld. CIT(A) regarding the disallowance of an amount of Rs.18,36,000 on account of interest paid by the appellant on borrowings made from the Bank, subsequently given to M/s. ASM Technologies Ltd. as a security deposit for office space. The ld. AO concluded that the appellant failed to establish the utilization of the loan for business purposes and lacked sufficient evidence to prove business expediency.Issue 2: Commercial expediency in the transaction with M/s. ASM Technologies Pvt. Ltd.The ld. CIT(A) held that there was no commercial expediency in the transaction, but acknowledged savings in rent as a form of commercial expediency, leading to the deletion of the Rs.18.36 lakh addition. The appellant argued that the transaction was on commercial terms with business expediency for both parties, as the appellant needed office space due to business expansion, which was provided by a group company, M/s. ASM Technologies Ltd.Issue 3: Utilization of premises for business purposesThe Tribunal noted the lack of evidence establishing that the appellant had occupied the premises provided by M/s. ASM Technologies Ltd. Documents submitted post-hearing did not conclusively prove the utilization of the premises for business activities. The Tribunal granted the appellant an opportunity to produce further evidence before the ld. CIT(A) to establish the genuine use of the premises for business purposes.In conclusion, the Tribunal allowed the Revenue's appeal for statistical purposes, setting aside the ld. CIT(A)'s order and remitting the case back for fresh consideration on merits regarding the utilization of premises for business activities.
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