2015 (5) TMI 1211

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.... have heard rival contentions and perused the record. Facts in brief are that the assessee is engaged in business of trading in rights of cinematographic films and television programme software etc. During the course of scrutiny assessment the AO disallowed interest paid to Star India Pvt. Ltd. as the loan transactions have not been declared in Form 3CEB and, therefore, escaped addition of Transfer Pricing officer. The AO further held that advance was not taken as business expediency, but was to evade taxable income in the hands of the assessee. By the impugned order the CIT(A) deleted the disallowance after observing as under :- "2.3 Facts, materials available on record and cited judicial precedence have been considered. The A.O.&....

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....identify whether there were actually valid reasons for appellant to take loans or whether there were adequate funds available with the appellant lying unutilized, ignoring which such loans have been taken and payment of interest debited. In view of the facts of the case and material available. the appellant's claim seems justified. The said disallowance of interest expense of Rs. 1,37,94,000/- is deleted." 4. We have considered rival contentions and found from the record that the financial statements of assessee evidenced utilization of borrowed funds for procuring rights in respect of various genres of films from third parties for sale to SGL Entertainment. As such borrowed funds on which interest has been paid were utilized for pur....