TaxTMI 
TaxTMI 
2025 (9) TMI 1702
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...."Ld. CIT(A)"), both dated 09.12.2024 for the A.Ys. 2016-17 & 2017-18. Since the issues involved in both these appeals are identical and belong to the same assessee, one consolidated order is being passed for the sake of convenience and brevity. ITA No. 205/Hyd/2025 for A.Y. 2016-17: 2. The assessee has raised the following grounds of appeal : "1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law. 2. The learned Commissioner of Income-Tax (Appeals) erred in confirming the addition of Rs. 20,47,628/- made by the Assessing officer towards disallowance of finance cost. 3. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact....
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....the Act on 26.03.2022, making a disallowance of Rs. 20,47,628/- u/s 36(1)(iii), thereby assessing the total income at Rs. 68,80,158/-. 4. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). It was submitted before the Ld. CIT (A) that ITAT Hyderabad had already decided the issue in assessee's own case for AYs 2012-13 & 2013-14 in its favour. The Ld. CIT(A), however, noted that the ITAT allowed those appeals on legal grounds and not on merits. He therefore upheld the Ld. AO's order and dismissed the appeal. 5. Aggrieved with the order of Ld. CIT(A), the assessee is now in further appeal before this Tribunal. The Learned Authorised Representative ("Ld. AR") submitted that the sole issue in the ....
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....erest free own funds on account of share capital and reserves of Rs. 1,18,12,599/- and page no. 10 of the paper book (Note 5 of audited balance sheet) showing interest-free secured redeemable debentures of Rs. 5,49,25,000/-. The Ld. AR submitted that, the assessee had total interest-free funds of Rs. 10,81,08,570/- (Rs.4,13,70,971/- + Rs. 1,18,12,599/- + Rs. 5,49,25,000/-). 7. The Ld. AR also inviting our attention to Note no.10 of the audited financial statement of the assessee placed at page nos.10 and 11 of the paper book and demonstrated that the assessee has noncurrent investments were Rs. 8,55,99,500/- only. Accordingly, the interest-free funds available with the assessee are more than the amount of....
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....As far as the admission of additional evidence is concerned, the assessee has filed audited balance sheet extracts, details of customer advances and investment statements. These documents go to the root of the matter and were not before the Ld. AO/CIT(A). In the interest of justice, we admit the additional evidences filed by the assessee. 10. We have gone through the share holders funds of the audited financial statement of the assessee placed at page no.7 of the paper book which is to the following effect : KAPIL FOODS AND STRUCTURES PRIVATE LIMITED CIN : U15499TG1992PTC014019 Balance Sheet as at March 31, 2016 Notes As at 31st March 2016 As at 31st March 2015 EQUITY AND LIABILITIES Rs P....
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.... assessee has total interest-free funds of Rs. 10,81,08,570/- (Rs.4,13,70,971/- + Rs. 1,18,12,599/- + Rs. 5,49,25,000/-). 12. We have also gone through Note no.10 regarding non-current investments of the audited financial statements of the assessee placed at page nos.10 and 11 of the paper book which is to the following effect : 13. On perusal of above, we find that the assessee has invested in non-current investments amounting to Rs. 8,55,99,500/-. We find that the assessee has total interest-free funds of Rs. 10,81,08,570/- against invested in non-current investments of Rs. 8,55,99,500/-. Accordingly, it is clear that the interest free funds available in the hands of the assessee are more than the amoun....
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....n ITA No. 205/Hyd/2025, we hold that our findings in ITA No. 205/Hyd/2025 for AY 2016-17 shall mutatis mutandis apply here also. Accordingly, consistent with our observations therein, we set aside this issue to the file of the Ld. AO with a direction to verify the additional evidences and, if on verification it is found that the assessee had sufficient interest-free funds to cover the investments in non-current assets, the disallowance made u/s 36(1)(iii) shall be deleted. 17. In the result, the appeal of the assessee in ITA No. 206/Hyd/2025 is allowed for statistical purposes. 18. To sum up, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 26th Sept., 2025.....