TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 250
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....contest separate order of learned first appellate authority on certain common grounds of appeal. The facts as well as issues are stated to be pari-materia the same in all the 3 years and therefore, the appeals were heard together and are now being disposed-off by way of this consolidated order for the sake of convenience and brevity. The assessee has filed cross-objections against the same which would be adjudicated along with revenue's appeals. 2. The Ld. counsel for Assessee, Ms. Aarti Sathe, at the outset, submitted that the sole issue involved in all the 3 years is interest disallowance u/s 36(1)(iii). The issue of interest disallowance, on merits, is squarely covered in assessee's favor by the decision of this Tribunal in assessee's o....
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....ed to reassessment proceedings for the year under consideration. Accordingly, an assessment was framed u/s 143(3) read with Section 147 on 19/11/2009 wherein the assessee was saddled with interest disallowance of Rs. 448.51 Lacs. The reassessment proceedings were triggered pursuant to assessment proceedings for AY 2005-06 wherein the assessee was saddled with certain interest disallowance. Therefore, to make similar disallowance in AY 2002-03, the assessee was subjected to reassessment proceedings. 4.2 The assessee had debited interest on bank overdraft for Rs. 300.92 Lacs and other interest of Rs. 147.59 Lacs for the year under consideration and claimed deduction of the same u/s 36(1)(iii). The assessee being resident corporate assessee ....
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....Further, the transactions were not declared in Form 3CEB as per the Transfer Pricing Regulations. Therefore, the interest payment aggregating to Rs. 448.51 Lacs was held to be not in business expediency and not mandated by business exigencies. Finally, the same was disallowed while framing the assessment. 5.1 Before Ld. CIT(A), the assessee while challenging the legality of reassessment proceedings, assailed the interest disallowance on merits also. However, not convinced with assessee's legal grounds, Ld. CIT(A) upheld the reassessment proceedings since the original return of income filed by the assessee was processed u/s 143(1) only and the conditions of reopening were duly fulfilled. 5.2 The issue, on merits, however, was decided in as....
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....funds from SIPL is not in business expediency and with a view to avoid taxability in the hands or the assessee, we found that funds were borrowed from SIPL for business purpose, the expenses being wholly and exclusively for the purpose of business based on commercial expediency. Interest expenses were incurred for purpose of assessee's own business, profits of which are chargeable to tax under the provisions of the Act. Further whether a particular expenditure is necessary considering commercial expediency has to be decided from the point of view of businessman alone and not by the Revenue authorities. For this purpose reliance can be placed on decision of Hon'ble Supreme Court in the case of DCIT v/s Core Health Care Ltd.(2 TR 194)....
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.... from the point of view of businessman alone and not by the Revenue authorities. Further, M/s SIPL was not coming within the purview of Sec. 40A(2). Finally, the revenue's appeal was dismissed. 7. From the enumeration of facts in proceeding paragraphs for the year under consideration, it is quite evident that the reassessment proceedings were triggered based on interest disallowance in AY 2005- 06. The said disallowance, has ultimately been deleted by the Tribunal for AY 2005-06. Nothing on record would suggest that the said decision was not applicable to the facts of the present case. No change in material facts have been brought on record. In fact, the reassessment proceedings were triggered in this year on the basis of disallowance made....
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...., the interest expenditure, on merits, would be an allowable expenditure. 11. Since the facts are pari-materia the same as in AY 2002-03 except for the fact that Ld. CIT(A) has quashed the reassessment proceedings and not adjudicated the issue on merits. Nevertheless, the issue, on merits, is squarely covered in assessee's favor by the cited decision of Tribunal for AY 2005-06. Resultantly, the assessee's cross-objections which contest the issue on merits stand allowed. The same would render deliberations on revenue's appeal merely academic in nature. Consequently, the revenue's appeal stands dismissed as being infructuous. The assessee's cross-objections stands allowed whereas the revenue's appeal stands dismissed. ITA No.3266/Mum/2010 ....