TaxTMI 
TaxTMI 
2021 (7) TMI 113
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....ssment years 2013-14 and 2014-15 respectively. By the aforesaid order, the Income Tax Appellate Tribunal (henceforth referred to as 'the Tribunal') partly allowed the appeals filed by the revenue and upheld the disallowance of a sum of Rs. 1,46,83,683/- ordered by the Assessing Officer under Section 36(1)(iii) of the Income Tax Act, 1961 (for short, 'the Act'). 2. Briefly stated, the appellant filed its NIL return for assessment year 2013-14 which was taken up for assessment. The Assessing Officer passed an order of assessment dated 10.03.2016 disallowing a sum of Rs. 1,46,80,683/-, which was interest on the borrowed capital on the ground that it was utilized towards work in progress. In respect of the assessment year 2014-15, the appellan....
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....d for investment in work in progress in any event? 4. The learned counsel for the appellant contended that in respect of the assessment of the appellant for the assessment year 2010-11, the very same substantial question of law came up for consideration before this Court in ITA No.315/2018 connected with ITA No.388/2018 and ITA No.313/2018. A coordinate Bench of this Court after considering the appeals held: "9. It is well settled legal proposition that where interest free funds are available to the assessee and were sufficient to meet its investment, the presumption is that the investments were made from interest free funds available with the assessee. [See: RELIANCE INDUSTRIES LTD., SUPRA]. The assessee had made investment by way of sh....
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....the details furnished by the assessee had accepted the contention that investment was made by the assessee out of the funds owned by it. 10. The Supreme Court in RADHASOAMI SATSANG Vs. COMMISSIONER OF INCOME- TAX' (1992) 60 TAXMAN 248 (SC) has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspecc permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order; it would not be at all appropriate to allow the position to be changed in subsequent year. For the aforementioned reasons, the substantial question of law No.1 is answered in the negative and in fav....
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....Court of Delhi in Monnet Industries Ltd. supra, which was upheld by the Supreme Court in a decision in (2012) 25 taxmann.com 236 (SC). In CIT VS. UP ASBESTOS LTD. supra Allahabad High Court held that were the assessee increased the capacity of its manufacturing plant, the proposed business was not an individual business but vertical expansion of present business. Therefore, Section 36(1)(iii) was amended by Finance Act, 2003 by inserting a proviso to curtail the deduction insofar as interest on borrowed capital is relatable to extension of existing business, which reads as under: 36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to i....