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2015 (6) TMI 1269 - ITAT AHMEDABADDeferment of sales tax liability u/s. 43B - sales tax liability in respect of which the assessee was availing the benefit of Sales Tax Deferment Scheme - HELD THAT:- We find that similar issue was considered by the ITAT in assessee's own case for Assessment Years 2005-06 and 2006-07 [2010 (6) TMI 839 - ITAT AHMEDABAD] and also for AY 2008-09 [012 (9) TMI 1248 - ITAT AHMEDABAD] and the ITAT held that the disallowance u/s 43B in respect of such sales tax liability on which the assessee is entitled to Sales Tax Deferment Scheme is not justified. Decided against revenue. Disallowance of interest under proviso to Section 36(1)(iii) - AO was of the opinion that the part of the interest payment was attributable to the funds utilized for creation of capital work-in-progress, therefore, made proportionate disallowance of interest - AO also found that during the year under consideration, the assessee gave advance without charging of interest - CIT(A) deleted addition - HELD THAT:- As against this interest free fund, the investment in capital work-in-progress is only Rs. 26.01 crores and advance to others is Rs. 12 lacs. Thus, the interest free fund available with the assessee is more than 10 times of the capital work-in-progress and advance to others. Admittedly, the AO has not pointed out that any borrowed money has been utilized for the purpose of investment in capital work-in-progress or for advance to others. He made proportionate disallowance merely on the presumption that the proportionate borrowed money must have been utilized for investment in capital work-in-progress, etc. We find that under the similar circumstances, in the case of Raghuvir Synthetics Ltd. [2013 (7) TMI 806 - GUJARAT HIGH COURT] upheld the decision of ITAT. In that case also the interest free fund available with the assessee was much more than the interest free loan given by the assessee. AO has not proved that the borrowed money has been utilized for giving of interest free advances. AO disallowed the interest on proportionate basis. The CIT(A) deleted the addition which was upheld by the ITAT. Decided against revenue.
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