TaxTMI 
TaxTMI 
2019 (1) TMI 1258
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....,74,16,977/- made by the Assessing Officer on account of interest. 2. The assessee in the present case is a Government of Sikkim Undertaking incorporated primarily to create industrial development in the State of Sikkim and also to provide financial support to create such industrial development. Since the return of income for the year under consideration was not filed by the assessee, a notice under section 148 was issued by the Assessing Officer on 19.05.2015, in response to which the return of income was filed by the assessee on 12.06.2015 declaring total income of Rs. 1,09,25,559/-. In the Profit & Loss Account filed along with the said return, a sum of Rs. 27,14,80,961/- was debited by the assessee on account of interest expenses. As n....
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.... industrial development in the State of Sikkim and to provide financial support to create such industrial development. For this purpose, it took loans from various banks and financial institutions. (ii) The appellant is taken a loan of Rs. 285 cr. from four nationalized banks for the purpose of land acquisition for construction of airport in Sikkim. (iii) As per notes of accounts, the corporation has adopted a policy of charging interest to the Government of Sikkim on the above loan to the equivalent of interest charged by the consortium of four banks together with other expenses incurred in connection with said securitization loan minus the interest earned from securitization loan funds invested as term deposit. (iv) The Assessee has....
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.... In view of the above, the disallowance made of Rs. 1,74,16,977/- stands deleted and all the grounds related to the same are allowed". Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted on behalf of the assessee before the authorities below as well as before us, the loan of Rs. 285 crores availed from the consortium of four Nationalised Banks was partly invested by the assessee in FDRs and the balance amount was provided to the Government of Sikkim as per the mutual understanding. In respect of the loan availed from the consortium of four Nationalised Banks, the ....