2022 (7) TMI 998

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.... Tax Act, 1961, (hereinafter 'the Act') vide order dated 30.12.2011. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in disallowing the interest expenditure to the extent of Rs. 1,10,74,397/- on the ground that the same was not incurred for the purpose of business and made disallowance u/s. 36(1)(iii) of the Act. 3. Brief facts are that the assessee company is engaged in the business of construction and allied activities. The AO, on verification of balance sheet of the assessee company, noticed that the assessee company has borrowed substantial loans from banks under the head 'secured loans' having closing balance of Rs. 22,49,03,129/- and unsecured loans of Rs.....

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.... 3=1+2   4 5=3-4   surplus           2006-07 38,54,853 5,93,22,751 6,31,77,604 49,18,725 49,18,725 5,82,58,879   Pg No.3 of Page Book Pg No.3 of Page Book Pg No.1 of Page Book Pg No.3 of Page Book Pg No.3 of Page Book   2007-08 6,31,77,604 4,80,48,287 11,12,25,890 4,99,19,637 5,48,38,362 5,63,87,528   Pg No.10 of Page Book Pg No.10 of Page Book Pg No.8 of Page Book   Pg No.10 of Page Book   2008-09 11,12,25,890 6,34,91,441 17,47,17,331 3,68,66,011 9,17,04,373 8,30,12,958   Pg No.16 of Page Book Pg No.16 of Page Book Pg No.14 of Page Book   Pg No.6 of CIT(A) Order   2009-10 17,47,17,331 (2,73,598) 17,44,43,733 ....

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....nish the details of investment made in the firm with F.Y. wise and also the source for the investment. The assessee has submitted the details along with enclosures dated 20.04.2018. While going the through the submission it was found that the assessee has made investment of Rs. 3,51,66,838/- during the F.Y-2008-09 relevant to the A.Y-2009-10. The balance investment amount of Rs. 9,17,04,373/- was pertained to earlier years. 2. While examining the bank accounts and other submission it was found that the assessee has taken loan during the month of April. May & June and the investments made in the firm is also May & June. So it is clear that the assessee has utilized the borrowed money to make investment in the form to the extent of Rs. 85,5....