2025 (8) TMI 197

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...., they were heard together and are disposed of by this common order for the sake of convenience and brevity, though the quantum may differ. 2. Representatives were heard at length on the facts of AY 2013-14 in ITA No. 5029/Mum/2024. The grievance of the revenue reads as under: "1 Ground No. 1 Whether the Ld. CIT(A) erred in deleting the disallowance of Rs. 1,06,76,766/- in interest expense without sufficient evidence from the assessee to prove that the investment in Taraderiv International was for business purposes as required by Section 36(1)(iii)? 2 Ground No. 2 Whether the Ld. CIT(A) erred in disallowing the interest only on current year overdraft amounting to Rs. 2,20,59,332/- and not on the cumulative overdraft amount of Rs. 7,57,....

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....aptioned appeals were considered by the coordinate bench in ITA Nos. 1273/Mum/2021 and 1683/Mum/2021 for AY 2012-13. 4. We have carefully perused the order of the coordinate bench (supra) qua the grievance of the revenue. We find force in this contention and find that similar issues were considered by the coordinate bench in the assessee's own case in AY 2012-13. 5. The issues raised in ground No. 1 were considered by the coordinate bench in AY 2012-13 and decided as under: "On the other issue, the CIT(A) has granted relief in respect of interest expenses amounting to Rs. 33,72,105/-, the contentions of the Ld. DR that the claim has to be disallowed as no proper explanations and evidences were filed. We find the CIT(A) considered the so....

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....an be seen that the money received by assessee from business went to reduce the negative balance. The money given to GIDC resulted in increase in debit balance. This shows that the money was paid out of the borrowings from bank. In view of the above, the assessee should have capitalised this interest as per proviso to section 36(1)(iii). In view of the above, this disallowance of interest is upheld. This ground of appeal is dismissed The Ld.AR has made submissions on the claim. Since we took a reasonable view that interest on loan on land cannot be allowed as revenue expenditure till it commenced the production in the ground of appeal dealt at Para 9. Therefore we can not accept the Ld.AR contentions and up hold the action of the CI....