TaxTMI 
TaxTMI 
2014 (1) TMI 1433
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....at the time of hearing. 2. The brief facts of the case are that the assessee filed return of income on 29.10.2005 and the case of the assessee was selected for scrutiny. During assessment proceedings, the Assessing Officer observed that assessee has incurred expenditure on capital work in progress and had also transferred assets amounting to Rs.305.44 lakhs out of capital work in progress on which it had claimed depreciation. The Assessing Officer further observed that assessee had raised loans and interest amounting to Rs.22.86 lakhs was paid on these loans. He further observed that loans were used for capital investment as well as for the purpose of working capital. He formed an opinion that since the assessee had made an investment in c....
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....egarding unsecured loans it was submitted that no interest was paid on these loans and in respect of incorporate deposits it was submitted that there were short term deposits which were utilized for short term needs of the company. It was further submitted that there was cash accrual of Rs.4.11. crores and Rs.4.36 crores respectively in the preceding year and in the year under consideration. The Ld CIT(A) after gong through the submissions of assessee deleted the addition by holding as under:- "I have gone through the facts of the case, observations of the Assessing Officer submissions of the AR of the appellant and this ground of the appellant is being finalized after making the following observations:- i) On going through the findings o....
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....urchase of fixed assets like plant & machinery. After considering the submissions of AR I am convinced that no direct nexus could be established by the Assessing Officer regarding the interest bearing funds and its utilization for purchase of plant & machinery. Further there was adequate cash available with the appellant to fund its fixed assets. In view of the circumstances, I am inclined agree that the arguments of the AR of the appellant. Accordingly, this addition is deleted. This ground is treated as allowed. " 4. Aggrieved, the revenue is in appeal before us. 5. At the outset, the Ld Dr filed application for adjournment. However, after going through the file, we found that it was a small matter relating to SMC and which could be di....