2022 (9) TMI 497

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....r for the sake of brevity and convenience. However, we are taking ITA No.6836/Del/2018 for A.Y. 2013-14 as a lead case. 3. The relevant facts as culled from the material on records are as under : 4. Assessee is a Multi-State Cooperative Society registered under the Multi State Cooperative Societies Act, 2002 and is stated to be engaged in the business of manufacturing of chemical fertilizers through its seven operative units at various places. Assessee electronically filed its return of income for A.Y. 2013-14 on 29.11.2013 declaring total income of Rs.912,65,23,380/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 31.12.2017 and the total income was determined at Rs.1369,02,....

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....d that assessee had not shown any figure of interest pertaining to investments or capital work-in-progress. Assessee was asked to furnish the interest component in capital work-in-progress and investments made out of borrowed funds to which assessee made detailed submissions. It was inter alia submitted that assessee had sufficient interest free funds for making investments and investments were out of own interest free funds. The submissions of the assessee was not found acceptable to AO. AO was of the view that the onus was on the assessee to establish the nexus of utilization of own funds in investments and capital work-in-progress. AO also noted that assessee has not given any working with regard to the borrowed funds or own funds. AO th....

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....work-in-progress. On such borrowed funds used for capital work in progress, he worked out the interest at Rs. 35.46 crores which according to him should have been capitalized and not claimed as deduction u/s 36(1)(iii) of the Act and thus made addition of Rs.35.49 crores. 7. Aggrieved by the order of AO, assessee carried the matter before CIT(A). CIT(A) noted that identical issue arose in assessee's own case before his predecessor in A.Y. 2012-13 and his predecessor by following the order of Tribunal in assessee's own case for A.Y. 2010-11 deleted the addition made by CIT(A). He therefore, following the decision of Tribunal in assessee's own case, wherein it was held that assessee had sufficient interest free funds to meet the capital expe....