2018 (9) TMI 2077

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....13 passed under section 143(3) of the Act. The Revenue has raised the following grounds of appeal: 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was correct in deleting the disallowance of Rs. 13,22,54,824/- made by the Assessing Officer u/s. 36(1)(iii) of the Income Tax Act?" 2. At the outset of hearing, the ld. Authorized Representative (AR) of the assessee submits that the ground of appeal raised by Revenue is covered in favour of assessee and against the Revenue, as the ld. CIT(A) while passing the impugned order followed the order of Tribunal in Assessment Year 2009-10. The ld. AR of the assessee furnished the copy of decision of Tribunal in ITA No. 1655/Mum/2013 for Assessment Yea....

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....     Share Application Money Advanced   62.39       Total Interest Free Advances   62.39       5. We have seen that during the assessment proceeding, the Assessing Officer noted that the assessee made interest payment of Rs. 57.25 Crore (approx) while the assessee received interest of Rs. 39.05 Crore (approx). The assessee also availed secured and unsecured loan of Rs. 771 Crore. The Assessing Officer issued show-cause notice to the assessee as to why the excess interest paid over interest received should not be disallowed. The assessee furnished its explanation and contended that they have sufficient interest free fund and no addition was require....

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....isallowance without any basis. He further held that the assessee had made investment which would yield income in form of dividend, that the investment had been made for purpose of earning income, that interest expenditure incurred for earning income had to be allowed u/s.36 (1) (iii) of the Act. Finally, he deleted the disallowance made by the AO. 4. During the course of hearing before us, the Departmental Representative (DR) stated that issue could be decided on merits. The Authorised Representative (AR) supported the order of the FAA. After considering the rival submissions we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. The AO had made the disallowance on the basis that in the....