TaxTMI 
TaxTMI 
2017 (3) TMI 318
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....ng the disallowance of Rs. 1,60,95,995/- out of interest expenses. 2. That the Ld. CIT(A), New Delhi has erred on facts and in circumstances of case by upholding the disallowance without appreciating the complete facts. 3. That the Ld. CIT(A), New Delhi has erred in law as well as on facts and in circumstances by disregarding the verdicts of Hon'ble Jurisdictional High Court. 4. The appellant craves leave to add, amend or vary from the aforesaid grounds of appeal at or before the time of hearing. 2. The brief facts of the case are that the Return of income declaring income of Rs. 4,91,90,884/- before set off of unabsorbed depreciation for AY 2002-03 and NIL income after partial set off of unabsorbed depreciation was filed on 29.....
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....e order dated 19.12.2011 passed u/s. 143(3) of the Act, 1961. 3. Against the aforesaid order of the AO, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 02.12.2013 has dismissed the appeal of the assessee. 4. Aggrieved with the aforesaid order, the Assessee is in appeal before the Tribunal. 5. At the time of hearing, Ld. Counsel of the assessee has filed the written Synopsis, the contents thereof read as under:- "It is respectfully submitted before Hon'ble Bench that: 2. The appellant is a public limited company engaged in the business of manufacture and sales of glass shells and funnels used in color television picture tubes. This appeal is preferred against confirmation by the CIT(A) of the add....
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....y amounting to Rs. 16.59crores. 6. The Assessing Officer as well as Ld. CIT(A) did not appreciate the fact that the appellant is maintaining a bank account with common funds in which all the deposits and withdrawals were made. 7. The learned Assessing Officer calculated notional interest on presumptions without establishing any nexus between the funds procured and given to the subsidiary company. 8. There is no finding in the assessment order that the funds have been used for the personal benefit of the directors. 9. The Hon'ble Jurisdictional High Court in the matter of CIT Vs Dalmia Cement Bharat Ltd [ 330 ITR 595] held that "In the absence of anything to show that the interest-free loan given by the assessee company to it....
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.... purpose of business, the revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and to decide how much is reasonable expenditure having regard to the circumstances of the case. Copy of the decision is attached herewith at page no 36 - 44. 14. Hon'ble Hon'ble Supreme Court in the matter of CIT, Bombay Vs. Walchand and Co. Private Ltd (1967) 65 ITR 381 (SC) ITA No 1249/2011 held that in applying the test of commercial expediency for determining whether an expenditure was wholly and exclusively for business, the expenditure has to be adjudged from the point of view of the businessman and not of revenue. It is humbly prayed that notional interest made by the AO....
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....ed further interest free loan amounting to Rs. 3,15,00,000/- to M/s Palka Investment Pvt. Ltd. The loans given to M/s Palka Investment Pvt Ltd. were out of internal accruals of the assessee company and in accordance with the commercial expediencies of the assessee company. As on 31-03-2009, networth (Capital plus Reserve) of the assessee company was amounting to Rs. 79.82 crores as against the ICD granted to subsidiary amounting to Rs. 16.59crores. The Assessing Officer as well as Ld. CIT(A) did not appreciate the fact that the asessee is maintaining a bank account with common funds in which all the deposits and withdrawals were made. We observe that the Assessing Officer calculated notional interest on presumptions without establishing any....
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....subsidiary company." Respectfully following the above case law, the addition made by the AO is hereby deleted. Ground No. 4 is allowed." 7.3 We further note that again in Assessee's own case, in the Assessment Year i.e in AY 2012-13, the CIT(A) has deleted the same addition vide order dated 20-07-2016 by holding as under:- "5. Ground no. 4 relates to disallowance of interest expenses of Rs. 2,32,26,000/- made by the AO. I find that this issue has also been decided by the then CIT(A)-8 in the appellant's own case for the AY 2010- 11 in their favour. Therefore, for this year also, on the identical facts, his order is followed." 7.4 After perusing the aforesaid decisions of the Ld. CIT(A) for the assessment year 2010-11 and 2012-1....