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2012 (8) TMI 189 - AT - Income TaxDisallowance towards interest - term loan availed by the assessee was in fact utilized for the purpose of acquisition of the specific asset - assessee has transferred some funds to the group concerns – Held that:- Assessee has not indicated the purpose for which the loan was advanced or the commercial expediency which necessitated advance of funds by the assessee - when the funds were diverted and the assessee paid interest on the borrowed funds, the proportionate interest relatable to funds transferred to group concern has to be disallowed – against assessee Addition of Rs. 1 lakh towards the amount outstanding in the name of sister concern of the assessee - assessing officer added the outstanding amount in the name of sister concern since three years' period has been expired – Held that:- Provisions of section 41(1) found that the principle that the expiry of period of limitation prescribed under the Limitation Act cannot extinguish the debt but it will only prevent the creditor from enforcing the debt. Therefore, the provisions of section 41(1) are not applicable - assessing officer is not justified in adding back the amount of Rs. l lakh to the total income of the assessee – In favor of assessee Deduction u/s 80IB for extracting granite from granite hills and crushing granite boulders - DR submitted that extracting granite from granite hills cannot be considered to be a manufacturing activity – Held that:- Tribunal had an occasion to consider the very same issue in the assessee's own case and found that the activity of the assessee amounts to manufacture - Since the activity of the assessee was considered by the co-ordinate bench of this Tribunal and held to be manufacturing activity entitled for deduction u/s 80IB, for the sake of consistency - assessee is entitled for deduction u/s 80IB of the Act
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