AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 1323
X X X X Extracts X X X X
X X X X Extracts X X X X
....peals, these are being disposed of by this common order for the sake of convenience and brevity. 2. The first grievance is common in both the appeals and relates to deletion of addition of Rs. 5.73 crores in assessment year 2006-07 and Rs. 2.96 crores in assessment year 2007-08. 3. Briefly stated, the facts of the case are that the appellant has constructed a mall at Saket, New Delhi. Parking space was provided in the basement of the mall. The assessee has made provisions of parking in the basement area of the building. The basement area is also being used for various services, like, keeping various techno mechanical instruments like DG sets, water pumping station, AC plant, Lift etc. The basement area is also the foundation of the bu....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The cost of lighting, power and water consumption for operation and maintenance of parking area was to be borne by the assessee and the assessee is charging parking fee for this area. The ld. CIT(A), accordingly, directed the Assessing Officer to delete the impugned addition. 7. Before us, the ld. DR strongly supported the findings of the Assessing Officer. 8. On the other hand, the ld. counsel for the assessee relied upon the findings of the ld. CIT(A). 9. We have heard the rival submissions and have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee, in its Mall, has made provision for parking area as per the sanctioned plan and rules and bye laws of DDA. There is no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng this addition, the Assessing Officer observed that the assessee has paid advances for purchase of shares of certain companies. These companies were owners of land at Banjara Hills, Hyderabad and advances for purchase of shares were disclosed in the balance sheet as share application money. As the amount paid was made on account of investment, the Assessing Officer was of the opinion that proportionate interest paid to DLF Ltd on the funds utilised out of unsecured loans needs to be capitalised as there is a direct nexus between the borrowed capital and investment in shares. The Assessing Officer, accordingly, disallowed interest of Rs. 50,99,086/-. 13. Before the CIT(A), the assessee strongly contended that it had interest free funds ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... add anything to what the Assessing Officer has observed in the assessment order for making the impugned disallowance. 17. On the other hand, the ld. AR reiterated what has been stated before the lower authorities. 18. We have given a thoughtful consideration to the orders of the authorities below. In our considered opinion, the three conditions for disallowance of interest u/s 36(1)(iii) of the Act are (i) the appellant should have borrowed capital, (ii) capital should have been borrowed for the purpose of business and (iii) interest should have been paid on the borrowings. There is no dispute that the assessee has borrowed funds for its business. There is also no dispute that the assessee was having sufficient interest free funds to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payment from customers only upto 25.03.2006 and not till 31.03.2006. The Assessing Officer was of the firm belief that the assessee has not recognised any income for six days and accordingly computed interest for six days at Rs. 3,01,730/-. The Assessing Officer further found that the assessee has not charged interest from two persons, namely, Shri Kiran Deep Mann and Shri Rajpal Singh amounting to Rs. 69,056/- and Rs. 74,639/-. The Assessing Officer, accordingly, made addition of Rs. 4,45,425/-. 22. Before the CIT(A), the assessee explained that he has adopted 25th March as the cut off date and accordingly, interest on delayed payment has been charged upto that date. It was strongly contended that the Assessing Officer has grossly erred....