2021 (10) TMI 222

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.... appeared on behalf of the assessee, even though the notice of hearing was sent by registered post to the assessee on more than one occasions. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee. 3. The facts relating to the issue are stated in brief. The assessee is engaged in the business of operating of resorts. The A.O. noticed that the assessee has claimed interest expenditure of Rs. 5.75 crores as detailed below:- Particulars Amount in Rs. Bank charges 9,12,980 Interest paid to Standard Chartered Investments & Loans India Ltd. 5,47,65,611 Interest paid to Others 18,36,597 Total 5,75,15,188 The A.O. noticed that the assessee has borrowed Rs. 55 crores from Standard C....

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....was justified in disallowing the interest expenditure. 6. We heard Ld. D.R. and perused the record. The assessee has filed written submissions before Ld. CIT(A), which read as under: "i) The appellant had an outstanding amount of Rs. 45 Crores payable to Yes Bank, as on 01.04.2014. In the Annexure-3 submitted herewith, it may be noted that the appellant received Rs. 44.10 Crores from M/s. Coffee Day Hotels and Resorts. Private Limited to repay the Loan borrowed from Yes Bank. ii) Subsequently, the appellant entered into the Facility agreement with M/s. Standard Chartered Investments and Loans Melia Limited, marked as Annexure-4, to repay the loan obtained from M/s. Coffee Day Hotels and Resorts Private Limited. The purp....

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....ges is not related to Capital Borrowed, the same is an allowable expenditure." 7. The LD. CIT(A) also noticed that the amount disallowed by the A.O. included bank charges of Rs. 9.12 lakhs, which have been charged by the bank for accepting credit/debit cards. The Ld. CIT(A) also noticed that the asset side of the balance sheet contains only assets, which are applied for business purposes. He noticed that the borrowings made by the assessee from M/s. Coffee Day Hotels & Resorts Pvt. Ltd. were used to repay the term loan taken from Yes Bank Ltd. The present loan taken from Standard Chartered Investment & Loans India Ltd. has been used to repay the loan taken from Coffee Day Hotels & Resorts Pvt. Ltd. These facts show that the assessee was ....