TMI Blog2018 (4) TMI 1660X X X X Extracts X X X X X X X X Extracts X X X X ..... orks allotted to assessee has not been mentioned in the said agreement but at the same time, the A.O. has accepted the said agreement without questioning its legality or enforceability. Sale consideration was first received by Goyal & Co. and thereafter after the gap of 4 to 6 days, the same was transferred to the account of the assessee. On such fact, it cannot be said that the assessee has deliberately passed on some favour to Goyal & Co. Therefore, it cannot be said that by doing so, the assessee has unnecessarily incurred interest expenditure on loans from Punjab National Bank. The assessee is also having sufficient interest free funds available with it. The disallowance of proportionate interest is uncalled for. Expenditure on T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) has erred in law and on facts in deleting the addition of ₹ 2,91,375/- made on account of disallowance of solar water heating equipments. 3. Ground nos. 4 to 10 are extension of the grievances raised vide ground nos. 1, 2 3. 4. Representatives of both sides were heard at length. Case record carefully perused and with the assistance of the ld. counsel, we have carefully gone through the documentary evidences brought on record in the form of a paper book in the light of Rule 18(6) of the ITAT Rules. 5. Briefly stated the facts of the case are that the assessee is developer of project and is also a contractor. During the year under consideration, the assessee entered into a development agreement dated 18.01.2008 with M/s. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med separately by the assessee. The A.O. once again formed a belief that the said expenditure was incurred by the assessee beyond the scope of work allotted to it in the development agreement. The A.O. disallowed ₹ 2,91,375/-. 8. On further probe, the A.O. found that the assessee has debited interest expenses of ₹ 25,89,150/- on the loan facility availed from the Punjab National Bank. The A.O. noticed that the sale receipts were first received by Goyal Co. and later on transferred to the assessee. The A.O. was of the opinion that once it was agreed with Goyal Co. that the units sold by respective parties, the sale consideration of the same shall be collected by the respective parties. The A.O. was of the opinion that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat quantitative specification of works allotted to assessee has not been mentioned in the said agreement but at the same time, the A.O. has accepted the said agreement without questioning its legality or enforceability. We find that the sale consideration was first received by Goyal Co. and thereafter after the gap of 4 to 6 days, the same was transferred to the account of the assessee. On such fact, it cannot be said that the assessee has deliberately passed on some favour to Goyal Co. Therefore, it cannot be said that by doing so, the assessee has unnecessarily incurred interest expenditure on loans from Punjab National Bank. Moreover, the assessee is also having sufficient interest free funds available with it. The disallowance of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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