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2016 (1) TMI 713 - AT - Income TaxDisallowance of interest - CIT(A) deleted the addition - Held that:- There is no finding in the assessment order also to suggest that the assessee did not use the borrowed funds for the purpose of business. In the event that the assessee maintains mercantile system of accounting, has provided interest on the loans from the Ministry in its accounts, and since, there is no evidence to suggest that interest on the loans have been waived by the Ministry, the disallowance of interest invoking the provision of section 36(1)(iii) is not in order, no matter that interest has not been paid on the borrowings from the Government. In view of these findings, we do not find any infirmity in the conclusion arrived at by the ld.CIT(A) while deleting the disallowance of impugned interest. - Decided in favour of assessee Disallowance of 50% of depreciation on Bathinda Plant - CIT(A) deleting the addition - Held that:- As before deleting the addition, the ld. CIT(A) should have afforded an opportunity to the Assessing Officer to examine the sale invoices placed before him for the first time, which has been made the sole basis for deletion of addition. There is also no finding in the impugned order whether the production alleged to have been made before 01.10.2003 was a regular production or on trial basis. In view of these facts, we think it appropriate to restore the issue to the file of Assessing Officer for deciding the issue de novo after examining the evidences laid before the ld. CIT(A) in the form of sale invoices. The Assessing Officer shall also give finding on the contention of the assessee that depreciation is allowable even on the ground of passive use of the asset. The Assessee shall be at liberty to place all evidence, if any, before the Assessing Officer in support of its claim. Needless to say, the assessee shall be afforded reasonable opportunity of being heard before deciding the issue afresh - Decided in favour of assessee for statistical purposes.
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