2014 (4) TMI 116

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....udicial Member: This appeal by the Revenue is directed against the order of the Commissioner of Income-tax(Appeals) Guntur dated 13.4.2011 for the assessment year 2006-07. 2. Solitary issue arising for consideration in this appeal relates to disallowance of interest payments made by the Assessing Officer, which has been deleted by the CIT(A). 3. At the outset, it may be noted that none ap....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ds loan was invested in fixed assets. On verification of the assets statement, it was noticed that the assessee has converted closing work in progress into fixed assets during the month of November, 2005. Therefore, he noted that the interest on the above addition to fixed assets of Rs.9,13,55,370 to be charged form April, 2005 to November, 2005, i.e. for eight months was worked out to Rs.73,08,43....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pet. The works were completed by 30th September, 2005. It is also seen that the appellant raised funds from the ECBS, loan from Axis Bank, internal accruals of the company etc. While it is a fact that out of the total additions of project modernization met out of term loans and ECBS, the Assessing Officer has grievously erred in estimating that the total project was funded by term loans when in fa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rest on above on proportionate basis @ 12% pa. For this purpose, the amount of loan was taken @ Rs.9.13 crores. Before the CIT(A), the assessee contended that for the purpose of interest, the Assessing Officer had erroneously considered the External Commercial Borrowings (ECBs) apart form the term loan of Rs.375 lacs. The CIT(A) agreed with the contention of the assessee and directed the AO to del....