2019 (9) TMI 502

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....ssment Year 2001-02. 2. This Tax Case Appeal was admitted on 06.07.2009 on the following substantial questions of law: "1.Whether in the facts and circumstance of the case, the Tribunal was right in holding that the appellant is not entitled for deduction of interest having regard to the principles of commercial expediency? and 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the appellant is not entitled for deduction of interest having regard to application of principles of attribution when there exists mixed funds?" 3. We have heard Mr.N.Devanathan, learned counsel for the appellant/assessee and Mr.S.Rajesh, learned Standing Counsel for the respondent/Revenue. 4. The....

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....such a technical product, which would require some specialized technical skills. With regard to the plea raised by the assessee that her husband has given his property as a collateral security to the assessee for availing cash credit facility from the bank, the CIT(A) has stated that the collateral security given by her husband is of much lesser value than the money advanced by the assessee to her husband. 7. Aggrieved by the order dated 08.04.2005 passed by the CIT(A), the assessee preferred an appeal before the Tribunal contending that assessee by using all the manufacturing facilities established by her husband, derived commercial advantage in the shape of timely delivery of processed dhall, high quality processing and discount on pro....

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.... no material placed either before the CIT(A) or before the Tribunal to belittle the processing of dhall. 9. We do not find any material, which was referred by the CIT(A), to come to a conclusion that manufacturing of dhall does not require heavy work and technical skill. Unfortunately, the CIT(A) and the Tribunal lost sight of the legal submission made by the assessee. In the case of CIT Vs. Kandagiri Spinning Mills Ltd. [reported in (2008) 298 ITR 306], a Division Bench of this Court held that amounts given by the assessee to its sister concern from the profits earned by it during the relevant assessment years and not by diverting the funds borrowed from the financial institutions and banks, interest paid on borrowed capital cannot b....