2012 (5) TMI 690

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....R PER RAJENDRA SINGH, AM: This appeal by the assessee is directed against the order dated 13.5.2011 of CIT(A) for the assessment year 2007-08. The only dispute raised in this appeal is regarding disallowance of interest under section 36(1)(iii). 2. The facts in brief are that AO during the assessment proceedings noted that the assessee had made payment of Rs. 1,71,11,300/- for purchase of....

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....uisition of asset out of borrowed funds and, therefore, no disallowance could be made. The AO however did not accept the contentions raised and disallowed interest proportionate to payment made for acquisition of property which was computed at Rs. 8,64,821/-. The assessee disputed the decision of AO before CIT(A) and reiterated the submissions made earlier that the assessee had not borrowed any su....

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....was pointed out that the assessee had own funds of Rs. 4.40 crores and there were interest free borrowings of Rs. 8.13 crores. Besides, the profit of the assessee during the year was Rs. 75.00 lacs. Thus fresh payments made during the year of about Rs. 27.00 lacs were easily explained from own funds. The ld. AR also referred to the decision of the Tribunal in assessee's own case in case assessment....

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.... had been capitalized and disallowed under section 36(1)(iii). The case of the assessee is that most of the payments had been made in the earlier year and only a sum of Rs. 27.91 lacs was paid in the year. In the earlier year there were no disallowances. In assessment year 2006-07, disallowances made has been deleted by the Tribunal in the order dated 25.1.2012 (supra). We find that the Tribunal i....