2019 (2) TMI 1862

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.... grounds of appeal: 1. The order of The Commissioner of Income Tax (Appeals)-Ill, Chennai-600 034 dated 17.01.2013 in l.T.A.No.646/11-12 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the disallowance of Rs. 2,09,24,5291- u/s 36(1)(iii) of the Act being the interest on borrowed capital on the ground of diversion of borrowed funds to M/s Thiruvengadam Investments P Ltd. in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the sustenance of the disallowance of Rs. 2,09,24,529/- u/s 36(1)(iii) of the Act being the interest on borrow....

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....gned order and any order passed in violation of the principles of natural justice is nullity in law. 3. The brief facts of the case are as under:  The appellant is a company incorporated under the provisions of the Companies Act, 1956. The appellant-company filed its return of income for the AY 2009-10 on 30.09.2009 disclosing total income of Rs. 1,44,89,527/-. Against the said return of income, the assessment was completed by the ACIT, Company Circle-II(2), Chennai u/s. 143(3) of the Act vide order dated 30.12.2011 at a total income of Rs. 6,94,76,277/- after making certain disallowances. The disallowance inter alia includes disallowance of interest claimed u/s. 36(1)(iii) of the Act of Rs. 2,09,24,549/- on the ground that....

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....d that on the same set of facts in the subsequent AY i.e., 2010-11, the ld. CIT(A) deleted the addition and the Department is not in any further appeal before this Tribunal and he also filed copy of orders of the ld. CIT(A)-6, Chennai dated 08.04.2016 in ITA No.281/CIT(A)-6/2015-16. He further stated that the loans were advanced to M/s. TIPL during the normal course of the business and in terms of the joint development agreement entered into between the appellant and M/s. TIPL he also filed copy of the joint development agreement and he also placed reliance on the decision of the Hon'ble Supreme Court in the case of S.A Builders Ltd. v. CIT 288 ITR 01 (SC). On the other hand, the ld. Sr. DR placed reliance on the orders of lower authorities....