TaxTMI 
TaxTMI 
2019 (1) TMI 805
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....-12. The Assessing Officer carried out scrutiny assessment, which has given rise to multiple grievances at the hands of the petitioner. One of the issue was the decision of the Assessing Officer to disallow interest expenditure of Rs. 73.87 lakhs claimed by the assessee under Section 36(1)(iii) of the Income Tax Act, 1961 ("the Act" for short). 3. This issue was raised by the petitioner in the appeal before the Tribunal in following manner : "On the facts and in the circumstances of the case and in law, the AO erred in disallowing proportionate interest on borrowed funds of Rs. 73,87,875 on the alleged ground that the outstanding receivables from a subsidiary company on account of sales, technical fees, etc. are in the nature of interest....
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....ind that the assessee was allowed relief in AY 2001-02 on account of 'commercial expediency' and following Apex Court judgment in S.A. Builders Vs. CIT 288 ITR 1. But the facts are different here. No TP adjustment has been made for the impugned transaction and secondly the outstanding amount represent 'receivables' on account of debtors for sales / technical fees as per the contention of the assessee. Therefore, on the facts and circumstances of the case, we deem it fit to restore this issue back to the file of AO for fresh adjudication in proper perspective including benefits derived by AE on account of receivables visavis normal debtors of the business. The assessee is directed to cooperate with the lower authorities forth....
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.... the assessee's contention on allowability of the interest expenditure of Rs. 73.87 lakhs and deleted the addition previously made. 7. We have heard learned Counsel for the parties at some length. Having heard learned Counsel and having perused documents on record, the first thing that emerges is that on account of the order dated 29.12.2018, passed by the Assessing Officer giving effect to the Tribunal's remand directions, the entire issue has become one of academic. In the present case, therefore, we are not inclined to examine the correctness of the Tribunal refusing to exercise its jurisdictional powers. However, we have serious doubt whether the Tribunal should have at the very outset given a direction to invoke the Transfer P....